How to Balance a Checkbook

how to balance a checkbook

Balancing a checkbook isn’t just a great way to keep your checks organized. A checkbook registry can also be a great way to get back to budgeting basics.

Explore this Checkbook Guide:

Learning to balance a checkbook registry can sound really daunting to someone who never really used a checkbook before. But balancing a checkbook is actually really easy!

A balanced checkbook follows the same principles of a balanced budget. All you need to do is keep track of the money going in and out of your account. From there checkbook balancing is just basic addition and subtraction.

How to Get a Checkbook

There are actually a few ways you can go about getting a checkbook. You can open up a checking account at a bank or credit union and order a checkbook from them or you can order a checkbook from a third-party check vendor.

Order checks at the bank or credit union

You can get a checkbook from a bank or credit union that has your account. Then, the bank will print you you’re very own checkbook and send it to you in the mail.

When opening a checking account, your chosen financial institute will provide you with a small checkbook to get you started. Once you use up your first, smaller book of checks you can start ordering more checkbooks.

This book of checks is then connected to your checking account. When you write out a check from it, it takes the funds you outline out of that same checking account.

How you order checks will depend on the system for ordering new checks set up by your financial provider. Some banks and credit unions will require you order checks at their location while others will allow online and mobile checkbook ordering.

Order checks from a third-party vendor

When you buy checks from a third-party vendor you can personalize your checks! This means you can pick a theme or check design and customize the way your name and address appear on the check.

Make sure the company is reputable before you order any checks from a third-party vendor. Your bank or credit union might even have suggestions for check printing vendors to use.

What is a Check Registry?

A check registry is a notebook designed with columns to help you keep track of all your checks. You can buy a checkbook registry notebook, download a free PDF template for a checkbook registry, or use the checkbook registry in the back of your checkbook.

You can also use a check registry to keep track of more than just your checks. A check registry can also keep a record of all the transactions going in and out of your account. You can even think of a check registry as keeping a manual bank statement.

A typical check registry has six columns:

The Check Number column is where you’ll jot down the check identification number. This ID number is usually found on the bottom right-hand corner of each check. This way you can literally keep track of each check being used.

You can also use this column to jot down other types of transaction methods like, “ATM” or “Debit card” or “Deposit.”

The Date column is simple and self-explanatory. Here you can keep track of the date you issued each check. For other types of transactions, you can write the day you received your paycheck, the date you made that ATM withdrawal, the date you made that purchase with your debit card.

The Transaction Description column is where you write down what the transaction was for. You might write something like, “birthday gift” if you wrote a check for your niece’s birthday present. You might write “groceries” if you used your debit card to pay for groceries yesterday.

The Debit column can go by many names. It could also be called the “withdrawal” section or the check “amount” section because this is the column you use to write down the money going out of your account. Here you’ll put down payments and purchases you make.

The Credit column can also go by other names. This section might also be called the “deposit” column. This column is where you write down the money going into your account. Here you’ll jot down any funds you receive like gift money or paychecks.

The Balance column is usually the final column on your check registry. This is where you’ll keep track of the total balance in your account. In each row, as you record a withdrawal or deposit into your account, you’ll also calculate the new total balance in your account. This way you’ll always know how much you have in total funds.

The Cleared checkmark boxes might have their own separate column or be found as checkmark boxes in the withdrawal or deposit columns. These checkmark boxes are used to check off when a check or transaction has “cleared” or finished processing.

For example, if you write out a check for $100 and give it to your niece as a birthday present, then you’ll wait a few business days for your niece to cash the check, and for those funds to officially come out of your account before you check this box.

This is useful to keep track of which checks have finished processing or which ones are still pending finalization.

What is Balancing a Checkbook?

To balance a checkbook means to make sure the financial records you’ve been keeping are correct. A checkbook is linked to your checking account, which means you can use your checkbook to keep track of your check transactions and any other transactions that are linked to your checking account.

So, what does balancing a checkbook mean? Balancing a checkbook means that you’ve kept a financial record by hand or on your own spreadsheet or on your own checkbook registry app. You’ve logged every transaction going into and out of your bank’s checking account. The balancing part comes at the end of each week, month, quarter, or even year when you go over those financial logs you’ve been keeping to make sure everything is correct and up to date.

Why You Want to Balance a Checkbook

Keeping a balanced checkbook could be the key you’ve been missing to keeping a balanced budget.

Budgeting can be really difficult for some people. If you are someone who has a really tough time sticking to their budget, then it might be time to get back to the basics of financing and start using a checkbook register.

Keeping a perfectly balanced checkbook register mainly consists of writing down every single expense and deposit going in and out of your account. By keeping such careful track of all your transactions, you can gain better control of your funds and spending. Budgeting is the ability to control yourself and your funds.

Keeping careful track of each and every transaction can also help you be more mindful of smaller spending that adds up over time. You might realize that all your money is going toward eating out every day or spending more on clothes than you actually have available for such spending.

When you’re keeping a close, personal eye on your finances you’ll also be more likely to catch mistakes or overdrafts. Then, instead of receiving a surprise notification later that you’ve been charged an expensive overdraft fee, you can quickly correct the problem! Sometimes banks and businesses can also make mistakes with your account, and you want to catch these mistakes so they can be fixed.

You can also stop yourself from making mistakes in the first place because you’ll know exactly what you can and can’t afford at all times.

Even more importantly, balancing your checkbook and making sure your own financial records match your bank’s financial records can keep you safe from financial fraud. A balanced checkbook will help you notice fraudulent activity on your account so you can act sooner against financial or identity thieves.

How to Balance a Checkbook

Now that you know what a checkbook is and how keeping a balanced checkbook can benefit you, it’s time to teach you how exactly to balance a checkbook.

Before you can balance your checkbook you first have to know how to keep a checkbook registry.

checkbook-register-example

A checkbook registry will look something like the above checkbook registry example. It will have the same standard six columns we’ve already outlined. To keep your checkbook registry, fill out each row with each transaction going in and out of your account each day.

check-example

Find the information you need for each column on the check you wrote. This is why it’s useful to keep a checkbook with what are called “duplicate checks” rather than a checkbook with only single checks.

Duplicate checks will have a thinner sheet of paper behind each check. When you write out your check, what you write gets transposed onto this thinner sheet of paper behind the check. Then, you can keep a copy of each check you write for your own records.

Using duplicate checks makes it easy to keep a checkbook registry because you can just use the check copy to fill out the information you need for each column.

At the end of each month, you’ll want to balance your checkbook registry by comparing your registry with your online bank statements. Compare each item to make sure the bank has them accounted for as well, and handle any discrepancies you might find between the two.

Try highlighting or crossing out each row in your checkbook registry as you account for it on your online bank statement. Once you’ve gone through each transaction you’ll know exactly where all your money went that month and you’ll be able to easily catch and fix any problems before they become bigger issues.

How to Balance a Checkbook Using Google Sheets

Excel and Google Sheets are two great programs to use for keeping and balancing a checkbook. They are especially helpful because you can use formulas in each cell to quickly calculate your checkbook register and budget.

Step 1: Open an excel spreadsheet or a Google Sheets document on your computer.

step-1_checkbook-register-example

Step 2: On the top row of your Excel Spreadsheet or Google Sheet, create the columns. In cell A1 type “Date,” in cell B1 type “Method,” in cell C1 type “Description,” in cell D1 type “Debit or Withdrawal,” in cell E1 type “Credit or Deposit,” in cell F1 type “Balance,” and in cell G1 type “Cleared.”

step-2_checkbook-register-example

Step 3: Freeze or set your top row by first, selecting the top row, then click “View” in the top menu bar and select “Freeze” and “1 row.”

Doing this will make it so your top row will stay in place and follow you as you scroll down the page.

step-3_checkbook-register-example

Step 4: Now it’s time to set the number formats for your document. To do this, just select all the rows and columns, click “Format” in the top menu bar, select “Number” in the drop-down menu, and then in the second drop-down menu select “Currency.”

By doing this the document will format all your monetary amounts in the same way without you having to manually add the dollar sign each time.

step-4_checkbook-register-example

Step 5: Format the Date column easily by selecting the Date column, selecting “Format,” then “Number,” and then “Date.” Now the dates you write in the Date column will all take on the same format.

step-5_checkbook-register-example

Step 6: Create your formulas by clicking on cell F3 (the second cell below the Balance column) and type the formula, =(F2-D3)+E3, and pressing enter. Now this cell is set up to calculate your new daily total balance automatically as you input your debits and credits each day.

step-6_checkbook-register-example

Step 7: Make all the cells in your Balance column have this same formula by copying cell F3, the cell that has the total balance formula you just wrote.

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Step 8: Next, select the rest of the cells in the Balance column and paste the formula you just copied. Google Sheets is smart enough that it will adjust the formula to fit each new cell it gets pasted into.

step-9_checkbook-register-example

Step 9: Now it’s time to start filling in your Google Sheets check registry! Start by finding your current balance and putting it in cell F2 at the top of the Balance column.

step-10_checkbook-register-example

Step 10: Next, start filling in the dates into your Dates column. You can also just add the dates in as you go since some days might not have any transactions and other days might have several.

step-12_checkbook-register-example

Each day that goes by, log in all your transactions. In the Method column record what type of transaction it was, whether it was a check, or an ATM withdrawal, or a debit card payment, or a deposit into your account.

Under the Description column, outline what the transaction was for, like groceries. In the Debit column, record the amounts you’ve spent, and in the Credit column, record the funds going into your account. As you do so, the formulas you created will automatically update your Balance column.

step-13_checkbook-register-example

As you use your check register it will start looking something like this.

step-14_checkbook-register-example

If you want, you can customize your Google Sheet check register however you want. You can change the sizes of each column to give more room when you need it, and you can change the cell background colors to differentiate between different columns or rows more.

Download a Free Google Sheets Checkbook Register Template Here.

How to Balance a Checkbook Using Excel

You can create the same checkbook register using Excel and following these same steps. What’s great about using a program like Google Sheets or Excel is that you can create a template, and then use that same template over and over again however often you decide to start a new checkbook register.

You can also then keep these Excel spreadsheets for your own personal financial records.

Download a Free Microsoft Excel Checkbook Register Template Here.

How to Balance a Business Checkbook

A business checkbook register is going to look similar to a personal checkbook register. But a business checkbook register might include more details and will only record business transactions.

To properly keep a balanced business checkbook, you might also have to keep several records like one for all your business checks, one for each day’s worth of transactions, one for each month’s worth of transactions, one for businesses expenses from suppliers, and one for employee paychecks.

Each business is going to have its own financial needs and call for its own form of organization. You don’t want any financial facet of your business to be left in the margins.

Common Checkbook Balancing Mistakes

The first mistake you can make when balancing your checkbook is to not compare your own records with the bank’s records. Your checkbook isn’t completely balanced until after this has been done. Comparing these two records will also keep you from making costly mistakes with your expenses.

This will also help you correct the mistake of forgetting to record a transaction. If you forget to record something then it will look like you have more money in your balance then you do. That’s why you should always double-check with your bank’s records to make sure you didn’t miss anything.

Something else that can cause you to make mistakes balancing your checkbook is not realizing that some transactions and deposits take a few business days to process. Keep this in mind so you don’t accidentally spend money you don’t have.

Protect yourself from bounced checks by getting overdraft protection and by doing everything you can to not go under a certain limit in your total balance.

You can also protect yourself from making mathematical errors by keeping your checkbook register on Google Sheets, Excel, or by using a calculator.

Checkbook Apps

Mint App: The Mint app is a finance and budget app that you can use to keep track of all your spending just like you would in a checkbook register. Mint will also let you limits and budgets for yourself.

QuickBank Checkbook App: The QuickBank Checkbook app is great for small businesses that need to organize all their finances. The records you keep here can also be downloaded into Quicken and Excel spreadsheets.

Checkbook – Account Tracker App: This app is simple and aesthetically pleasing to use. It has an incredibly easy user interface so you can both clearly record and understand your finances.

Volkron Checkbook App: The Volkron checkbook app is a bank account ledger with elegant and premium features. With this digital checkbook, you can finally go paperless with your checkbook register.

Free Checkbook Ledger App: The Free Checkbook Ledger is a great first app to get if you’ve never done checkbook balancing before. It operates very similarly to your standard paper ledger so it’s an easier transition for new budgeters.

Checkbook Pro App: The Checkbook Pro app is great for people who want to move on from the basics and get professional with their financial records. Checkbook Pro also lets you manage multiple accounts in one place.


Sources


The Budget Mom. “The Right Way to Balance a Checkbook.”

wikiHow. “How to Balance a Checkbook,” by Michael R. Lewis.

dummies. “How to Balance a Checkbook,” by Pierre Lehu.

The Balance. “How to Balance Your Checkbook,” by Deborah Fowles.

Sapling. “How to Balance a Checkbook Using Excel.”

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