How To Balance Your Checkbook
Keeping your checkbook balanced is the most important part of owning a checking account. If you are not careful, you could end up bouncing checks, trying to spend money that is not in your account, and having to pay huge penalty fees because of it. Regularly balancing your checkbook will ensure that you always know exactly how much money is available in your checking account, even when there are transactions that have not yet appeared on your bank statement.
You will need your latest checking account bank statements, a record of the checks that you have written, your checkbook register and, probably, a calculator.
Go through your bank statement and make sure that all of the payments that have gone in and out of the account are correct. If there are any unusual payments or mistakes that should not be there, you will need to contact your bank to ask them to remedy the situation.
Every transaction that appears on your bank statement should be recorded in your checkbook register. There may be some additional transactions in the checkbook register that have not yet appeared on your bank statement. During the process of balancing your checkbook, you will identify these outstanding transactions.
Place a mark in your checkbook register beside every check that appears on the bank statement so that you know it has been deducted from your account. Do the same for deposits made into your account.
Check the ATM and debit card withdrawals made from your account and copy any that have not already been added into your checkbook register.
Make sure you remember to record in your checkbook register any interest payments or bank fees that have gone in or out of your account.
Write a list of any outstanding checks that have not yet been paid from your account and work out the total of these checks. Write another list of all the deposits that have been paid into the account, but which have not yet appeared on the bank statement, and work out the total.
Now you are ready to calculate your current balance. Begin with the ending balance recorded on your bank statement. This is the total left after all of the transactions that have already been recorded on your bank statement. Add to this the total of the outstanding deposits. This will give you a new total that also includes all the deposits that you are still waiting to see on the bank statement. Finally, from this new total, deduct the sum of the outstanding checks. This will give you the true balance of your checking account, including all outstanding checks and deposits. It is also the amount that you have available to spend in the account.
If you have correctly balanced your checkbook, without forgetting any transactions, then the total you have calculated should be equal to the ending balance in your checkbook register as well as to the amount available in your checking account.
Categories: Checking Accounts Tags: check books, checking accounts
The Different Types of Checking Accounts
Many people in the developed world own a checking account, and chances are most of their money is in one. Checking accounts are one of the most used conveniences in modern day culture. You don’t even have to be an adult to own one, and with the advent of debit cards, they are just as quick and efficient as credit cards to use. But, did you know that there is more than one type of checking account?
A basic checking account is probably the type of account that you have if you’re reading this article. If you have this kind of account, you might do 5-6 transactions per day, and chances are you have a check card to assist in your spending. Some of these accounts require you to keep a minimum balance in the account to avoid maintenance and other fees. You are not paid interest in these accounts, so having a high balance is not beneficial. You may be limited to a certain number of transactions per month, so read your terms carefully.
Free Checking
Free checking is much like basic checking. You make as many transactions as you want and have as low of a balance as you want (provided it’s not negative). Free checking is very convenient and worry free.
Interest-Earning
These types of checking accounts normally require a minimum deposit to open and a minimum balance to stay open. You are paid interest every month, but the rate is so low that you might not even notice it. Most people do not recommend these types of accounts as it simply isn’t worth keeping the minimum balance.
Joint Checking
A join checking account is one that is owned and shared by two people. Normally, the account is shared by spouses or good friends. It is essential that you balance these accounts often as you are not the only one that has access.
Express
This account is for those that value their time. It enables you to use debit cards, ATMs and other such tools instead of writing paper checks. These types of accounts are especially popular with students. The downside to these accounts are that you have to pay a fee for using a teller. These types of accounts usually have low minimum balances and low to no monthly fees.
Lifeline
These accounts are for those that are strapped for cash. Monthly fees range from $0-5, and there is usually no requirement for minimum balance or deposit. You are limited to a certain number of checks that you can write each month.
Senior
Senior checking accounts are special accounts made for those that are 55 years of age or older. There are many perks included with a senior checking account ranging from free checks, low fees and other such discounts.