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Many people put off balancing their account, but it's a good idea to ensure that you know how much you have available and that you are in agreement with the amount reported to you by your financial institution. 

There are several ways to balance your checking account.  You don't have to invest in financial software, but some find using software such as MS Money or Excel helps them to track their budgeting and spending habits, too.

You can reconcile your account by going online or using a paper statement from your financial institution.  Here's what to do: 

  1. In your check register, place a checkmark next to the withdrawals you've entered for checks, debit and ATM withdrawals that match those listed on your statement.

  2. If you forgot to enter any withdrawals in your checkbook, now is the time to do so.  Enter those items listed on your statement as having cleared, including checks, debit and ATM transactions, automatic withdrawals, online bill payments, or monthly fees. 

  3. Now place a checkmark next to each deposit you've entered that matches those listed on your statement. 

  4. Again, if you've forgotten to enter a deposit in your checkbook, do so now.  This includes cash or checks you've deposited as well as automatic deposits such as your paycheck.

  5. Now it's time to see whether the total in your account after tallying your deposits and withdrawals matches what is listed on your statement.  Take the beginning balance you show in your check register, add in all the deposits and subtract out the withdrawals to come to your actual current balance. 

  6. Take your actual balance, then back out the deposits made but not yet cleared, and add back the withdrawals not shown on your statement as having cleared yet.  This new adjusted balance should equal the one shown on your statement.

  7. What do you do if you don't balance?  Don't panic, it may only be a calculation error.  Try running the numbers again using a calculator.  If you're still out of balance, then, repeat the process of verifying you have marked every cleared withdrawal and deposit in your checkbook.  See if you have earlier transactions than the current month that still have not cleared. 

Make a commitment to this process each month to ensure that your balance agrees with that shown on your statement and that there's been no unauthorized access to your account.  If you find an error, be sure to contact your financial institution right away.