Balancing a Checkbook - Lesson Plan

The balancing of your checkbook requires an immediate attention each month in order to make sure that your records coincide with that of the bank's records. Additionally, both the bank CAN and your checkbook register are susceptible to errors due to your omission to post a transaction. As a result you may end up overdrawing your checkbook and incurring $25 fees for every overdrawn check. Therefore, you should balance your checkbook monthly in order to avoid months of wading to find out about the mistake.

In order to balance you checkbook, all you need is your most recent bank statement and cancelled checks if you have such. Additionally, you should obtain a checkbook balancing form and your checkbook. Getting a calculator and a pen makes you ready to complete your checkbook balance.

In order to facilitate the balancing process, we have summarized a basic lesson plan you should follow.

Lesson #1 Check Reconciliation

If you have cancelled checks during the month, organize them in numerical order according to that stated in your statement. After this, use your checkbook register in order to check off every cancelled check that has been returned to you. You should verify that the amount you have specified coincides with the one that the bank has noted.

Lesson #2 Deposits Reconciliation

The deposits from your bank statement should be recorded in your check register. Don't forget to include the direct ones, which are usually overlooked by many. Verify the bank statement in order to makes sure that it includes all deposits you have made by using slips, paycheck stubs and etc. Do the same check off as the one you did for your checks.

Lesson #3 ATM Withdrawals and Debit Card Purchases Reconciliation

Again as with the checks and deposits reconcile your ATM withdrawals and debit card purchases with the ones stated in the bank statement. If you have missed any of the transactions in your check register, sign them in in order to ensure a complete and accurate balance of your checkbook.

Lesson #4 Bank Fees and Earned Interest

You should include in your checkbook register any earnings you have made through interest accumulations. Don't forget to write down any fees you have incurred during the transactions you have executed.

Lesson #5 Determine Outstanding Checks

The outstanding checks should be included in the second column of your balancing form. These are checks that have not cleared the bank. Here you should also include ATM withdrawals and outstanding debit purchases again not cleared the bank. After you have made the required listings, you should sum up the amounts.

Lesson #6 Determine Outstanding Deposits

The outstanding deposits should be included in the first column of the balancing form. These are deposits that have not cleared the bank and not checked off in your check register. Again you should sum up the amounts in the column.

Lesson #7 Bank's Ending Balance

You should check the amount that the bank has listed as an ending balance and then write it down in the bottom of the checkbook balancing form. The ending balance amount is found in the bank statement.

Lesson #8 Fill in the Outstanding Deposits

The calculated outstanding deposits from column one should be entered again in the bottom section of the checkbook balancing form, but this time at the second line.

Lesson #9 Fill in Outstanding Checks

The calculated outstanding checks from column two should be entered again in the bottom section of the checkbook balancing form, but this time at the third line.

Lesson #10 Final Checkbook Balance Calculations

Now you are ready to do the final calculations of your checkbook balance. You should add the results from lines one to three with the corresponding minus and plus signs. Use a calculator to facilitate your work and avoid math errors. The result you acquire should be entered in the fourth line and should coincide with the one stated in the checkbook register. If there is a difference, carefully go through the calculations made in the checkbook register.

Final Piece of Advice

You should take balancing your checkbook as seriously as possible. In order to facilitate your balancing process, use the available checkbook balancing form. Keep an accurate and complete record of every penny you have spent and don't intentionally write down smaller amounts for the purpose of giving room to errors. Additionally, do your checkbook balancing monthly not only when tax time knocks on the door.

Simple mistakes as writing down $15.89 instead of $51.89 can cause you a problem in case you have not reconciled. So, a trick you can apply to check for such inaccuracies is to divide by nine the amount the amount you are off. If it is evenly divided, then you haven't committed such a mistake.

Even if your check account is in a complete mess, don't give up and do your best to put it in order. You can also open a new one after taking the necessary actions of closing the old one and start from a scratch.

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