Balancing Your Checkbook

Balancing your checkbook is little more than making certain you and the bank both agree on what's happened to your bank account each month.

The bank provides a monthly statement of all transactions during the period. It is important that you balance your checkbook by comparing your checkbook register to the bank statement in a timely manner in order to:

* correct errors by the bank;
* find your own errors and know how much money you actually have

Reconciling your account register to the bank statement is a matter of comparing deposits and withdrawals and adjusting the bank statement for outstanding items not yet reflected by the bank. This process will go more quickly and smoothly if you make sure your bank register is up to date. Be sure all of your transactions are entered -- including direct deposit, ATM transactions, and debit charges -- before you start trying to reconcile to the bank statement. Here is a step by step:

* 1. Start with the bank balance from the bank statement

* 2. Determine if you have made any deposits that do not appear yet on the bank statement. List and total these "deposits in transit."

* 3. Determine if you have any outstanding checks (checks you have written and recorded in your checkbook but have not yet come through the bank). Make a check mark by each item that has cleared the bank as you match them up. When you finish going through the checks, the ones without a check mark are your outstanding checks. List them in the blanks under "outstanding checks" on the form and total the amount.