Money Management Tips

Balance your checkbook

Keeping an accurate checkbook register is the cornerstone of money management. This allows you to know exactly how much money you currently have to save or spend and helps you to keep track of where you spend your money.

Balancing made simple

Balancing your checkbook is one of the most basic habits for good money management. Our goal is to help simplify the balancing process and hopefully reduce the anxiety level when your bank statement arrives.

How your bank statement works
  • Seldom will your bank statement and checkbook register agree. But that is no reason to panic. It’s merely a matter of timing.
  • Your statement lists the transactions posted to or cleared through your account as of the closing date. The closing date is usually found in the upper right hand corner of the first page of your statement.
  • The day following your statement closing date, your statement is available for viewing through Online Banking (sign up for Online Banking). Otherwise you can expect to receive your statement in the mail within a few days. Meanwhile, it is important as you continue to write checks, make ATM withdrawals and/or deposits, that you track these transactions in your checkbook register.
Record, balance, repeat
  • Recording each transaction in your checkbook register and adding or subtracting it from the balance is the first step to simplifying the balancing act.
  • It is important to record the transaction at the time you actually write the check, make a withdrawal or make a deposit.
  • By recording the transactions and balancing your account total in your checkbook register, you will get a clearer picture of your spending habits and know exactly how much money you have. And, if for some reason you detect a problem, the sooner you can correct it, the better. If you forget to record a transaction, you can find it easily through Online Banking.
The balancing act

Balancing your checkbook each month within a day or two of receiving your statement will not only reduce your stress level, it will reduce the amount of time it takes to complete the task. (To verify your account balance in between statements, you may want to consider signing up for Online Banking.) You can use the Check Reconciliation Worksheet to help you balance your account.

Before you begin balancing your checkbook, gather the following:
  • Your last two bank statements
  • Your checkbook and checkbook register
  • Any ATM and/or debit card receipts that you did not record in your checkbook register

Eight steps for balancing your checkbook

  1. Record interest earned

In your checkbook register, enter all of the interest earned on your account (if applicable). The interest earned will appear on the front of your statement. Add this to your balance. Be sure to record any other credit amounts listed, such as bank corrections.

  1. Record service charges, etc.

In your checkbook register, record any charges that have been subtracted from your account, as shown on your statement. These charges may include monthly service charges, per check charges, ATM transaction charges and non-sufficient funds fees.

  1. Verify deposit amounts

Look at your latest statement and verify that all deposits listed match the deposit amounts listed in your checkbook register. Make a list of any deposits that are listed in your register but do not appear on your statement. Add these together. (TIP: Use the Check Reconciliation Worksheet to help you balance your account).

  1. Match all check entries

Match all the entries in your checkbook register with the transactions listed on your bank statement. Compare check numbers, dates, and dollar amounts on all checks written. If these items match, place a check mark next to the transaction in both your register and on the bank statement. If they don’t match, circle the item in both places so that you can come back to fix the error once all of the transactions have been checked off.

If transactions don’t match, check for one of these errors:
  • The item was recorded incorrectly in your checkbook register
  • The item was paid or was credited to your account for the wrong amount, or
  • Your check numbers were listed incorrectly
To correct the errors:
  • Simply look at and/or recheck your canceled checks or check images, deposit receipts, and/or ATM and debit card receipts.
  • Remember some items will not be checked off. These are called “outstanding items.” Note: If you do not have cancelled checks or images returned with your statement, contact your local branch and have them send a copy of the item in question.
  1. Check for outstanding items from previous statements

Be sure that all of the outstanding items from your previous statements have been included in this statement. Otherwise, they are still outstanding. Note: If an item is outstanding for 60 days or more, contact the person or company you wrote the check to and see if the check has been received. If it hasn’t, the check may have been lost and you may want to call the bank and make a stop payment.

  1. Verify other debits on statement

Verify that additional withdrawals listed on your statement, other than checks, are charged for the amount actually drawn. This includes ATM withdrawals, debit card transactions and any automatic debit transactions like insurance payments, loan and/or utility payments.

  1. List all outstanding checks

Make a list of all outstanding checks or ATM/debit card withdrawals. These are transactions that appear in your checkbook register that do not have a check mark next to them. Add these items together (TIP: Use the Check Reconciliation Worksheet to help you balance your account).

  1. Balance

Now, balance your checkbook register to your bank statement. Use the formula below, which is also located on the worksheet on the back of your printed statement. Compare this total with the ending balance in your checkbook register. They should be the same. If not, there’s a mistake. Do not panic! This can be easily fixed. If they are the same, congratulations! You’ve successfully balanced your checkbook.

If things don’t add up…
  • Take a short break to clear your head
  • Start by re-verifying your outstanding items
  • What’s the difference? Is your checkbook balance higher or lower than your statement? Subtract the smaller figure from the larger one to get the difference. Now…
  • Divide the difference by 9. If the difference is equally divisible by 9, the problem may be transposed numbers. For example, $258 was recorded as $285. Look over your receipts and cancelled checks and double-check your amounts.
  • Divide the difference by 2. If the answer you get is a “normal” dollars-and-cents amount (e.g., $7.19 rather than $15.125), look for that amount in your register…it was added instead of subtracted, or vice-versa
Still doesn’t balance?

Well, you’ve tried hard and made every effort. Now it’s time to ask for help. Call us or come by one of our locations. You will need to bring in your current bank statement and your checkbook register. Every effort will be made to assist you in balancing your checkbook, and next time it will be easier.

Calculate your net income

Know all of your sources of income, and what the actual amount is after deductions have been made (net income). Deductions may include items such as automated income tax withholdings, regular 401(k) contributions, or medical premium payments. Your net income ultimately determines what you can spend or save each month.

Create a personal budget

A budget is your roadmap for spending and is a tool to help you achieve your financial goals. Save your receipts and add up your expenses for a month. Subtract expenses from your net income. If the result is a positive number, then you are living within the limits of your income. If the result is a negative number, your expenses are exceeding your income. Look for non-essential expenses that you can reduce and recalculate. Ask yourself if each expense is a “want” or a “need,” and try to minimize spending on the “wants.” Most importantly, once you create a budget, stick with it. Make adjustments as necessary. Having a budget will allow you to control your money rather than your money controlling you. Download and use our Personal Budget Planner Worksheet to begin making your budget.

Minimize credit card use

Credit card debt is an easy trap to fall into. The best way to avoid this trap is to avoid using credit cards altogether. If you like the convenience of a credit card, consider getting a check/debit card instead which is accepted at most places that accept credit cards. The difference is that the expense is automatically deducted from your checking account balance, which reduces your urge to spend more than you have. Be sure to track each check/debit card transaction in your checkbook register.

Pay down your debt

If you have credit card debt or other debts, pay the maximum on your highest interest rate debts first and the minimum on lower interest debts. This will help you pay debts down faster.

Debt reduction and strategies for saving

The following tips are designed to help you reduce your debt quickly and economically, and help you establish and/or grow your personal savings.

1. Create a budget and stick with it

 Your budget should include all of your current expenses. Print the Personal Budget Planner Worksheet to assist you in creating a budget.

2. Don’t borrow additional money to pay off debts and/or bills


3. Cut expenses

Analyze your budget and determine where reductions can be made (e.g. eating out, buying snacks and lunch at work, going to the movies, etc.). Once you have determined how much you plan to cut, use this “found” money to pay down the balances on your debts.

4. Optimize your monthly payments

Pay the maximum amount towards your highest interest rate debts. Pay the minimum amount on all other debts.

5. Ask for reduced interest rates

Some creditors, especially credit card companies, will reduce your interest rates if you just call and ask. If you receive offers for other cards with lower interest rates in the mail, use those offers as leverage when you are re-negotiating your rates with your current creditors.

6. Set goals and priorities

Determine what’s important. When you prepare to buy something, ask yourself if this purchase is in line with the priorities you have set and will it help you reach your goal or delay it.

7. Visit the National Foundation for Credit Counseling

This is the home site for the National Foundation for Credit Counseling, a national non-profit network designed to provide assistance to people dealing with stressful financial situations. The site provides links and information for financial counseling, debt planner tools, and other helpful websites.

Establish savings

Pay yourself first! When you pay monthly bills, write a check to yourself and put it in your savings account. If you get your paycheck automatically deposited, ask your employer about having a portion of your paycheck deposited directly to your savings account.

Know your credit history

Credit reporting agencies collect data regarding your credit repayment history and sell this information to lending agencies. If your report shows that you are late paying bills, have maximized lines of credit, or have bankruptcies or other collection activities, this will negatively impact your ability to get credit.

Consumers can obtain one (1) free credit report once every 12 months from each of these three (3) credit reporting agencies: EquifaxTransUnion, and Experian.  Obtain your Free Annual Credit Report online, or call 877.322.8228.

If you have been denied credit, you can get a copy of your report for free by contacting the agency directly. If you find incorrect information in your credit report, contact the credit reporting agencies. They are required to investigate the information within 30 days and delete the information if it cannot be verified. Your rights are further described in the Fair Credit Reporting Act.

Helpful books & websites

Pay It Down
by Jean Chatzky

The Money Book for the Young, Fabulous & Broke
by Suze Orman

The Millionaire Next Door: The Surprising Secrets of America’s Wealth
by Thomas J. Stanley, Ph.D. and William D. Danko

How To Get Out of Debt, Stay Out of Debt and Live Prosperously
by Jerrold Mundis

Credit Card Debt: Reduce Your Financial Burden in Three Easy Steps
by Alexander Daskaloff

Slash Your Debt – Save Money and Secure Your Future
by Gerri Detweiler, Marc Eisenson, and Nancy Castleman

9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying
by Suze Orman
This is the home site for the National Foundation for Credit Counseling, a national non-profit network designed to provide assistance to people dealing with stressful financial situations. The site provides links and information for financial counseling, debt planner tools, and other helpful websites.
This U.S. government website is dedicated to teaching all Americans the basics about financial education. This site provides tips, tools and resources organized by where you are in life (“Life Events”), who you are (“My Resources”) and by specific hands-on tools (“Tools”).
Visit the Consumer Protection section for resources provided by the FDIC (Federal Deposit Insurance Corporation) to educate consumers, revitalize communities and promote compliance with the Community Reinvestment Act and fair lending laws.