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Balancing a Checking Account

Couple reviewing their finances.

Even in a digital age, knowing how to balance a checking account is a vital skill everyone should have. Tracking your spending and where you have money coming in from will make paying bills at the end of the month less stressful. It can also help you avoid fees and surprises when you go to swipe your debit card.

You can balance your account with a spreadsheet or other digital format, or by using pen and paper to reconcile your checkbook. Having a system that you stick to on a regular basis is the important part, not the “how.”

What are the steps for balancing your account?

When you sit down with your bills, receipts and more, the goal is to make sure your bank account matches with what you think you’ve spent or received. If you haven’t already done so, you will need to set up online banking with your bank so you can easily pull up your checking account.

Tracking your spending begins with keeping good records. Ask for receipts whenever possible and write down every time you use your debit card to fill up your gas tank, write a check to your mortgage company or withdraw $20 in spending money from the local ATM. You may find that a small file folder for your car is a handy place to keep receipts.

Depending on your schedule, you can write down your purchases and withdrawals in your checkbook register as soon as you return home. Or you may find that you’d rather total up your spending each day after your evening meal. Find what works for you, but make sure your tracking is accurate even down to the cent.
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When you write down every transaction as it occurs, you not only get an accurate picture of your checking account balance, but you're also more aware of where you are spending your money.
“When you write down every transaction as it occurs, you not only get an accurate picture of your checking account balance, but you're also more aware of where you are spending your money. This can help you with budgeting,” advises Angela Scott, SouthState Augusta Wheeler Road branch manager.

When you sit down to balance your checkbook, you will need a paper copy or digital version of your bank statement. This typically arrives monthly from your bank. Keep in mind that, if you use a paper copy that comes in the mail, it will be a few days old and may not have all of your most recent transactions.

As you go through the checks you wrote and online payments, note what hasn’t cleared yet. You will still need to subtract those payments from your overall balance to avoid overspending. Examples are outstanding checks you mailed to your local utility provider or school, a mortgage payment you submitted over the weekend, or a credit card payment you scheduled to process later in the week.
After you have all your receipts, pending transactions and checks gathered, it’s time to do some math and make sure what you have matches up with what your bank has in your checking account.
 

What are some tools you can use to balance your checking account?

Some people are organized by nature and may not have any problems keeping track of their spending. Others may find certain office supplies, like a receipt folder or notebook for writing down spending, helps them stay motivated.

Your bank’s online banking site and mobile banking app may have spending trackers and other financial tools available. They may also allow you to connect your accounts at other banks to see your entire financial puzzle in one place. Do your research about what is available at your fingertips.
Click here to learn about easy ways to check your account balance on the go.
 

Why should I balance my checkbook?

Writing down every latte you buy, babysitter fee, or cash withdrawal for a forgetful child doesn’t sound like the most fun. As you get into the habit, however, it will feel less like a chore.

Balancing your account will allow you to see trends in your spending, determine where you might want to cut back, and notice when your account is getting low. It’s better to spend a few minutes daily or weekly than overdraw your account and get hit with a fee.

Looking at your account on a regular basis will also help you catch any fraudulent transactions or incorrect amounts quicker. If you never check on your account, who’s to say a business didn’t overcharge you or charge you twice for a purchase? If you’re balancing your checkbook regularly, however, you can catch these errors in time for them to be rectified.

You don’t need an accounting degree to balance your checkbook. You just need to be willing to take a small amount of time on a regular basis -- once a week or once a month, perhaps -- to track what you've spent and what you've earned.
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The first question I ask them is if they keep a register. Normally the answer is no. They do not have any idea how quick transactions add up and lead to them overdrawing their account.
Scott says the common thread when customers incur an NSF fee is that they were not reconciling their account. “The first question I ask them is if they keep a register. Normally the answer is no. They do not have any idea how quick transactions add up and lead to them overdrawing their account,” she adds.

Scott challenges those customers to think about the money they spent in NSF fees and if they’d rather have spent that amount on something worthwhile.

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