What's the Deal with Balancing Your Checkbook?

I love Seinfeld. I love his little jokes that he throws into his shows. “What’s the deal with lampshades?! I mean, if it’s a lamp why do you want shade??” He seems to be the only comedian who can cover a wide range of topics and still be VERY family friendly! I love how Seinfeld can take everyday concepts and poke it a little until it is funny! He even has a bit about checkbooks. Take a minute to listen to this funny bit it will make this balancing a checkbook blog post a little lighter!

At this point, you are probably thinking, “what’s the deal with balancing my checkbook??” It is not everyday you hear someone talking about balancing their checkbooks. It actually feels a little faux paus these days! I myself was curious to know what people out there were thinking, so I held an Instagram Stories poll. I asked “Do you balance your checkbook?”:

Poll Results

I do not think many of us are actually surprised by the results. (In fact, I also questioned that on Instagram Stories, and the majority said they were also not surprised!) But, it makes me wonder why people are not balancing their checkbooks. Perhaps one may think it is a waste of time. Perhaps some people do not know how to balance their checkbook. And, perhaps for some it is a little of both. Maybe you do not have the time to teach yourself how to balance your checkbook!?

My hope is that by the end of this blog post you will at least put a little more consideration on the importance of balancing your checkbook moving forward. Because, I am here to tell you that there is, in fact, value in knowing exactly where your money goes, and when!

Why is balancing a checkbook good?
Let’s say you are not balancing your checkbook and all of a sudden you realize your bank balance has dropped by a few hundred dollars. This may cause some of you to pause, and then move on without giving it a second thought. Maybe you thought it was your car payment going through? What if it was not, though? What if it was fraud on your account, and you did not notice it because you are not balancing your checkbook? The things people can do these days is incredible! I have had fraud on my account several times, and thank goodness the bank is on top of things and called me right away. But, what if the bank was not on top of things? AND I was also not balancing my checkbook… Perhaps those charges would have just gone through without anyone noticing.

There is value in balancing your checkbook, even beyond the fraud situation, for the simple reason of knowing exactly what is going on in your checking account. Being in charge and directing where your hard earned monies are going that is freeing! Imagine, not having to pay bank fees for overdraft charges because you forgot you wrote that check back in December and now all the money has been spent, and the vendor you wrote the check to is just now cashing it! Do not let these little things slip by!

Who should be balancing their checkbooks?
I think it is key here to say who should actually balance a checkbook. I believe it should be anyone with a checking account. I know, you think I am crazy right now. But, seriously, if you have a checking account you should keep a list of all of the ins and outs that go down in that account. I would also say it is especially important for those who use their debit cards, and for those who also write checks (yes, checks still exist!).

When should you balance your checkbook?
My rule of thumb here is at the end of every month, at least. If you balance your checkbook at the end of the month it can be a retrospective as to how you spent your monies during the previous month, and how that lines up with your budget. That retrospective view hopes to inform and encourage the current month’s spending habits, because you can see what sort of life changes you need to make in order to line up expenses with your budget. I usually do this a couple of days before my paycheck arrives in my bank, that way I already know how I am spending my money before it even gets here. I find that this method helps me stay more accountable to not spending money I do not have nor spending it too freely.

How should you balance your checkbook?
It is really as simple as writing things down in the checkbook ledger the bank provides. It can also be as simple as carrying a notebook with you and writing things down. I am a huge proponent of Google docs (and writing things down, thanks Mom!) so, I keep my check ledger housed there, and then I am able to access it through my phone.

Here are a few rules of thumb for balancing your checkbook:

  • Write down a charge immediately when the purchase was made. Even better if you could record it as soon as you know it is going to happen.

  • When you write down the charge, make sure you are noting:

    • Amount of the charge

    • Date of the charge

    • Name of the vendor

    • If it was a check, you will need the check number (and please please please make sure you are not skipping checks!)

    • It is probably no surprise to you if I tell you I take it a step further and keep track of all sorts of crazy things like the date the charge actually hit the bank account, if it was a debit charge (where I entered my pin at the register) or an ACH (think electronic financial transactions/anything online).

I am not about to reinvent the wheel here -- so if you would like more detailed information on how to balance your checkbook head on over to this WikiHow page, it also has a cool excel template included! Tell me your thoughts and comments in the feedback section. I want to hear more from you about balancing your checkbook, and how I can provide help.

Edrina Calderon