Not many people actually enjoy balancing their financial accounts:  It can be time consuming and usually requires the repetitive use of some fairly basic math skills.  However, it's a good idea to make sure that you always know how much money you have and that your financial records match that of your credit union or bank.  Balancing your accounts will allow you to rest assured whenever making a purchase as well as avoid unnecessary fees and, doing so on a regular basis, will keep the numbers from mounting and becoming an unmanageable task.

Many people enjoy the ease of using financial software, such as Quicken or Excel in tracking their purchases and budget.  However, it is not necessary to have a sophisticated program in order to keep up-to-date on your financial records.  All it takes is a little time and your commitment!

Your paper statement or electronic statement from your financial institution can be used to balance any of your accounts, along with records that you keep on a daily basis.  Here's what to do:

  1. First, keep - and consistently update - a transaction register.  This is a small booklet provided to you by your financial institution, sometimes found in a box of checks.  In your transaction register, record all happenings in you account.  This includes cash, check, and automatic deposits, cash, check, and debit card withdrawals, service fees you are charged, transfers and any other financial activity that makes the account's balance go up or down.

  2. When you receive your monthly statement, compare it to your transaction register.  Make sure that all deposits you recorded reflect on your statement and that all withdrawals indicated on your statement are correct.  Place a checkmark in your register next to the withdrawals you've entered for checks, debit, and ATM withdrawals that match those listed on your statement to indicate that those items have cleared.

  3. If you notice any withdrawal or deposit that you forgot to enter in your register, ensure that it is, indeed, a transaction that you conducted and input it into your register accordingly.

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

  5. Now that you've matched all of your records to the records of your financial institution, 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 the deposits and subtract the withdrawals to come to your actual current balance.

  6. If there is a difference between the number that you come up with and the account balance on your statement, it may be because there have been deposits and/or withdrawals in your account that are not reflected on your statement.  In that case, take the number you came up with, then subtract any deposits made and input in your register but that don't show on your statement, and add back in the withdrawals that don't show on your statement yet.  This new balance should be the same as the one shown on your statement.

  7. Don't panic if you don't balance; it may just be a mistake in the math.  Use a calculator and do a double-check.  If the numbers still don't "add up" then re-verify that you have marked every cleared withdrawal and deposit in your register and statement.  There may be transactions from earlier months that are still not cleared.

Complete this process each month to ensure that your numbers agree with those of your financial institution and that there's been no unauthorized or mistaken access occurring in your account.  You can also do this more than once a month by taking advantage of your institution's online banking system:  Just use the above steps utilizing your register and your online transaction history as a type of statement.  If you find an error, be sure to contact your financial institution right away.


This information has been provided by Financial Wisdom Marketing Services, Inc. and is for educational purposes only.  Content from Financial Wisdom and/or Redwood Credit Union is not, in any way, intended to provide legal, tax, or financial advice.