7 reasons to balance your checkbook

By Lisa White

For a lot of reasons, the new year is an ideal time to get your finances in order. And a great place to start is your checkbook.

If you're like some Americans, balancing your checkbook is akin to getting a root canal. Yes, it can be painful and frustrating, especially for those who don't have math minds. Still, it's important to your economic well-being, and once you get into the routine, it can feel like much less of a chore.

Even if you have typically have sufficient amounts of cash, there are still a number of reasons why this task is vital. Here are seven of them:

  1. You can watch your bank. By balancing your checkbook each month, you ensure that it matches your bank's records. Yes, banks can make computing mistakes, even in this day and age, and this is the way to catch them. And because you typically only have 60 days to catch them, maintaining a regular balancing schedule is key.
  2. Overdraft fees add up quickly. Returned checks can be costly, typically $25 or more for each. By balancing your checkbook each month, you're less likely to bounce checks or incur low balance or overdraft fees.
  3. It streamlines problem-solving. When a banking problem does arise, you will have no clue where to start investigating if you haven't balanced your checkbook recently. Those who take the time and make the effort to reconcile their registers regularly can simply look at the month's transactions and efficiently see what the discrepancy is.
  4. Merchants make mistakes too. By balancing your checkbook, you can verify that the amount charged for a product or service is what you expected. Most companies are honest, but like banks, they can make mistakes too.
  5. The ways you can spend have multiplied. Between debit card transactions, ATM withdrawals, deposits and checks, there are a lot of ways you can interact with your checking account now. Because of this, balancing your checkbook has never been more important to help keep track.
  6. Technology can betray you. Online banking is handy, but it doesn't necessarily update in real time. Online balances can give people a false sense of having more money in their checking account than they actually do. Balancing a checkbook is the only way to know what your balance really is.
  7. It can help with budgeting. Keeping a close eye on the transactions in your checking accounts can provide important insight for budgeting your money. Keeping a well balanced checkbook can make it much easier to analyze your income and expenses at a glance.

Still not ready to pick up your register? Here are some ways to make balancing your checkbook easier each month:

  • Keep the register up to date. Make sure all transactions, including deposits, debit card purchases and cash withdrawals are accurately recorded in a timely way. Using checks with carbon paper can help ensure the amount for written checks is correct.
  • Don't forget automatic bill payments and direct deposits. Keeping a separate list of these transactions will make them easier to track.
  • Don't hesitate to use a calculator. Miscalculations are easy to make and can throw off the entire balance in an instant.
  • Enroll in Internet banking. An electronic record can make reconciling differences much easier.
  • Take advantage of automatic checking account alerts. These alerts, now offered by many banks, will send an email or text if there is a problem with your account.

Though it's not a task most of us relish, monthly checkbook balancing can give you more peace of mind and ultimately save you future headaches. Make it a point to get in the habit and reap the financial benefits in the coming year.