How to Balance your Checking Account

Balancing your checking account can be simple with a system in place

Balancing your personal checking account is a critical step in maintaining control of your finances. When you neglect to balance your checking account, you risk negative balances plus non-sufficient funds and overdraft fees. You might also end up overlooking debts or withdrawals that are unauthorized or unexpected. Make sure that you are balancing your checking account accurately every month by putting a system into place.

Balancing your checking account: An accurate starting point

In order to start balancing your personal checking account you need an accurate starting balance. If you are opening a new account, the beginning ledger balance is simple to come up with: Simply record your initial deposit amount minus any set-up fees charged by the bank. If you are just starting to balance an existing account, this can be more complicated.

• Check your statement or call your bank and ask for your current balances and any transactions pending on the account. If you have access to an online statement, you can utilize that for current figures.
• Always make sure the check number of the last processed check is the one previous to the top check in your checkbook. If it's not, you will have to search your memory to note the amount of other un-cleared checks to accurately balance your checking account.
• Look at the last ten debit card transactions and check that against receipts to be sure everything you have utilized your debit card for has processed.
• You should also ask your bank about pending withdrawals or deposit amounts. If something hasn't yet posted, you need to anticipate it to avoid overdrawing your account.

During the initial set-up of your personal checking account ledger, you are going to want to check your statements frequently and take note of anything you might overlook. Once you establish your routine, it will be easier to calculate your balance.

Balancing your checking account: Manual transactions

To accurately balance your checking account, you have to keep a record of all money coming into and out of the account on a daily basis. Every time you write a check, pay a bill online or use your debit card, make sure you are recording the name of the payee, the amount of the transaction and the date. Many find it helpful to save all debit receipts in one location so they all get recorded. For deposits, record the date and amount.

Balancing your checking account: Automatic transactions

Statement items like banking fees, earned interest, and automatic deposits or payments can change your personal checking account balance on a daily basis. Review your past statements and contact your bank to make sure you are aware of any monthly transactions taking place. Record them and the date they are posted to the account. This may mean remembering to log-in or call your bank on the expected transaction dates to get their exact amounts.

Balancing your checking account: Verification

Even when you are meticulous about getting every last credit and debit correct, there is a chance that there will be some discrepancy between your official statement balance and the figure you have calculated in your manual ledger. It is good practice to compare items on your bank statement and your personal ledger. Doing these things will make it simpler to balance your checking account moving forward:

• Check off all debits that have been processed.
• Check off all credits that have cleared.
• Verify that any unexpected transactions are legitimate, and deduct them from your ledger.
• If any transaction is left outstanding for an extended period of time, call and check on its status.

Open a personal checking account with Citizens Bank

Learn to better manage your finances and open a low-fee personal checking account from Citizens Bank. To get started, call and talk to a customer service representative at 1-877-360-2472 or apply online today.