Balancing your checkbook

Just the thought of balancing your checkbook is enough to scare many people off. If people don’t know how to do it, it sounds too hard and too scary, so people don’t even try. But by not balancing your checkbook each month you are missing out on the ability to keep track of your finances and avoid spending money you don’t have and ending up in debt. Luckily, if you are one of those people without checkbook balancing skills, there is still hope for you. It isn’t a particularly challenging thing to do and you can learn how to do it quickly. Here are the basics to get you started:

The first (and really the only) thing you need to remember is that every time you spend or receive money you need to write it down. Your checkbook probably came with a ledger right in it, but if you don’t have checks or you can’t find the ledger you can pick one up for a few dollars at a stationery store (or if you are more technologically inclined, there are all sorts of software programs which can help you).

At the beginning of the month when you get paid, write down the amount and money you have received. This is your starting point. Now, every time you spend money, be sure to write it down in the same place. If you are carrying your ledger with you then you can do it right at the time you spend the money. Otherwise, many people just put the receipts in their purse or pocket and then stick them on a drawer so that they can record them in the ledger once a week or so.

At the end of the month, all you do is add up all the money you have spent, add up all the money you have deposited into the account, subtract the money spent from the money deposited and you are left with what you should have left over. Now you check that against the balance in your bank account and, if you haven’t forgotten anything or made a mistake, they should match. If they don’t you can usually figure out what you have forgotten quite easily.

Balancing your checkbook is as easy as that. By doing it regularly and effectively you will have a much better idea of your financial health and you won’t spend money you don’t have. It also makes budgeting a breeze, because you have already done the hard part – figure out what you spend and how you spend it.