Calculator: Keep Your Checkbook Up-to-Date
Sooner or later, anyone having a share draft/checking account learns that an essential part of managing a checkbook is balancing it. This is an easy task if kept up-to-date, but a nightmare if not. For some people, the nightmare compounds itself to the point that they either stop writing checks to allow the account to somehow rectify itself, or they close the account and start over with a new one.
If you've never bounced a check or had a mistake in your checkbook, consider yourself fortunate. Most people who bounce checks believe they have more money in their accounts than they actually do because they've made errors in their checkbook registers. Common problems include addition and subtraction errors and forgotten items, such as ATM (automated teller machine) withdrawals or fees, debit card transactions, or automatic payments. Your credit union may offer the convenience of an overdraft protection program where your savings or money market account covers insufficient funds in your
Balanced checkbook benefits
Balancing your checking account is important for many reasons:
How to balance your account
Your first goal should be to maintain accurate records. Write down everything you do with your account. Keep every deposit slip and ATM and debit card transaction receipt, and accurately record the dollar amount and the date of transactions in your checkbook register. You never know when you may have to refer to one of these receipts.
Your second goal should be to reconcile your checkbook as soon as possible after receiving your monthly statement. Once you've mastered the following steps, you should be able to balance your account each month within 30 minutes to 45 minutes.
1. Find a comfortable place where you can spread out your materials and work without interruptions.
2. Collect your current statement; last month's statement; ATM, debit card, and deposit receipts; your checkbook and register; a tablet, pencil, and pen; and calculator.
3. Compare your statement with your check register to see whether all of the checks you've written have cleared your account. Place a check mark in your register beside each check that appears on the statement as having cleared.
4. Organize ATM and debit transaction receipts in order by date and compare them with your register. Place a check mark in your register beside every ATM withdrawal and debit transaction that matches those listed on your statement.
5. Repeat this procedure for every deposit.
6. On the back of your statement is a work sheet for calculating your checking account balance. If your credit union doesn't print this work sheet on the back of your statement, use a blank sheet of paper.
At the top of the page, write the balance shown on the front of your current statement. Keep in mind at this point that your statement probably isn't as up-to-date as your checkbook register. It might not show more recent deposits or withdrawals.
7. Add any deposits you've made that aren't listed on your statement. These are "outstanding deposits."
8. List the number and amount of any "outstanding checks"—those that have not cleared your account. Also include recent ATM or debit transactions not shown on your statement.
9. Add these uncleared checks and transactions and subtract the total from the sum in step seven above. This new balance should agree with the balance in your checkbook.
Sample work sheet
When balances don't match
If your checkbook and your statement don't match, verify your calculations and entries in your checkbook register.
1. From the balance in your checkbook register, subtract any service charges or fees listed on your statement that you haven't already entered in your register, such as ATM fees, cost of check orders, overdraft fees, or stop payment charges.
2. Subtract any electronic funds transfers, such as insurance payments, car payments, or other bills you automatically pay from your checking account.
3. Add any dividends listed on your statement that you've earned for the month.
4. Add any direct deposits listed on your statement that you haven't already recorded in your register, such as payroll checks, retirement checks, or dividends.
5. If your checkbook balance and your statement balance from step four agree, you are "in balance."
However, if they still don't agree, try the following:
Help from your credit union
Some credit unions charge a fee for helping members balance their checking accounts, usually $10 to $15 per hour. If the account is in such a state that correcting the problem is overwhelming or the member is clearly having a problem with budgeting personal finances, the credit union may recommend a credit counseling service.
For example, Lisa Todd, manager of the share draft department at Suncoast Schools Federal Credit Union in
Tampa, Fla., says, "If any of our members are having problems balancing their share accounts, we work with them; however, if they're having serious problems, we refer them to Balance, a credit counseling service sponsored by the credit union."
Helpful hints to stay in balance
Why use software programs
If you have a computer, you might decide to follow the advice of many accountants who recommend easy-to-learn software programs to maintain your personal financial records and balance your checking account. These programs are beneficial at income tax time, too, because all your records are readily accessible and you can transport them into income tax software programs. Always keep an up-to-date backup disk copy of your records in case you experience problems with your computer.
Once you've mastered the simple steps of keeping your checking account balanced, you'll enjoy the secure feeling of knowing that you're in control of your cash flow.
Provision of this calculator is not an offer of credit. Its use in no way guarantees that credit will be granted. This calculator is solely for informational purposes and provides reasonably accurate estimates; the calculations are not intended to be relied upon as actual loan computations.
Home & Family Finance® Resource Center