Do you find that one of the most difficult household record-keeping tasks to perform is reconciling your checking account and keeping track of the checks you write and the times you use your debit card? Sure I did and put it off for months and months until I finally got such a mess in my checking account that I had to close it and open a new one. I learned my lesson and solved some of the problems that caused all my frustrations.
I think using duplicate copy checks is a very good idea because I always have a record of the amount of each check. Also, every time I use a debit card, I’m careful to put the receipt in my checkbook. This serves as a reminder to update my check register. No matter what type of check writing method you use, it is very important that you keep track of all your transactions in your check register.
When you get your checking statement from the bank, keep it somewhere they won’t forget it. I usually put it with my bills to pay. That way I know I’ll remember to reconcile my account each month. If you throw it away in an unknown place, you will surely forget to balance your account later.
Selecting a specific time to reconcile your account each month is a good habit to get into. I know that life can be very hectic at times and only you know when you will have enough time to spend without interruption. When you’re ready, gather your account statement, checkbook and check register along with all ATM transactions for the previous month.
With all that said, let’s get started! I’m going to make this quick and painless, I promise.
DEBIT: All money items charged to your account, including checks written, debit card purchases, ATM cash withdrawals, fees and charges.
CREDITS: All items of money deposited into your account, including deposits you make and interest you may earn.
Grab a blank sheet of paper and we’ll create a ** worksheet for you to use to reconcile your account.
On the first line write: CHECK BOOK BALANCE: Next to that, write the amount of balance your check register says you have in your account.
On the second line write: BANK BALANCE: Next to that, write the ending balance shown on your bank statement.
On the third line write: FEATURED ARTICLES – Don’t write anything next to it yet.
Your worksheet should look like this:
CHECKBOOK BALANCE: $1,002.50
BANK BALANCE: $1,230.00
PENDING ISSUES:
Now, referring to your check register, place a check mark next to the items that have been cashed. You will find these items listed on your bank statement. When you’re done, go back through your check register and look for any items that aren’t checked… put an “O” next to all those items. These are your “Featured Articles”.
Next, list all the items that have an “O” next to them under the Pending Items line, and then add them all up. Add a line for this total… Total Items Pending.
Now your worksheet should look like this (example):
CHECKBOOK BALANCE: $1,002.50
BANK BALANCE: $1,230.00
PENDING ISSUES:
Check #123 $15.00
Check #126 125.00
Check #130 90.00
Total pending items: 230.00
Subtract from bank balance: $1,000.00
The example shows that there is a discrepancy between your checkbook balance ($1,002.50) and your bank balance ($1,000.00) plus (+) $2.50. So now you have to go hunting and find out why. Yuck!
So… ask yourself:
Did I add or subtract correctly? You must check it.
Forgot to add an article? Check the sequence of your checks. Are any missing?
Forgot to deduct an ATM service fee? Check all your ATM deposits to make sure you have subtracted every fee.
Forgot to deduct my bank service charge? BINGO THAT’S ALL! and it was $2.50!
You have reconciled your account and are IN BALANCE with your bank!
Draw a red line under the last balance in your checkbook register and write “On balance and date” so you know this is the last time your checkbook matched your bank statement. Do the same on your bank statement as well. Believe me; It will save you a lot of heartache down the road when you have a hard time trying to reconcile your account. This way you just have to go back to the previous red line.
** Typically on the back of your bank statement is a worksheet similar to the one we created above. You can certainly use that to reconcile your account. Just apply the same principles described above.
