How to Keep and Balance a Check Register (and Why You Should)
by Holly Rudolph
When I was a kid, I played bank. Our kitchen table chairs made great teller windows. I'd line them up in the family room and use the seats as my desk, passing transactions through the slats to my friend on the other side. My mom even supplied old checks—the routing and account numbers cut off—for me to fill out. Odd as it may sound, I still enjoy writing checks, even though it's now real money of mine that's going out to pay the bills.
Now, though, checks are becoming obsolete. Various forms of plastic are widely accepted and you can even pay using your smartphone. That same device also affords instant access to your account balance via an app, the web, or an automated phone system. However, I still keep a check register, and I think you should, too.
The most important reason to keep a register is to be in charge of your own money. Do not simply trust your bank or credit union to have it right. The tools that technology affords us can be eminently useful, but if you're leaving it all up to the bank to tell you how much money you have, you're doing yourself a disservice and risking problems.
Not every transaction is applied to your account immediately. Often it can take a few days before a purchase is posted or a bill payment goes through. If you're keeping your own records then you know what you've spent. If not, you might check your account balance online, not realize a transaction from a day or two ago hasn't yet gone through, and end up spending money you don't have. Overdraft fees should be avoided like the plague.
Financial institutions are also not infallible. I've had to call and have fees that never should have been charged to me reversed. It's rarer, but it does happen. And let's not forget about fraudulent charges, which are far too common. If you're not keeping track of your spending and reconciling it with your bank statement, these problems will be harder to spot.
Keeping a check register is simple. Here's how I do mine, along with a couple standard options:
This is your average blank check register (also referred to as a transaction register or checkbook). They can vary slightly in the column headers, but most follow this basic setup: check number/code, date, transaction description, withdrawal, [check box], deposit, and balance. Most banks supply these free to their customers (just ask your teller).
There are two main methods for keeping record of your transactions: the one-line and the two-line. The major difference between the two is the amount of description you include and the space that description takes up. My method, which you can see above, is a modification of the two-line version. I use the first line in the description column to note the type of transaction or the name of the person or merchant that I'm paying, and under that I write what it was for. I then skip the withdrawal and deposit columns and use the top line of the balance column for the transaction amount, and the second line for my new account total. That's how I like it.
The more traditional two-line version differs from my method by using the withdrawal and deposit columns and putting the remaining balance on the second line of the balance column, leaving a line between each amount.
The one-line is the same as a standard two-line except that you lose the second line for additional description and put everything on one row. If you have a lot of transactions to keep track of, this method will allow you to use your register longer than if you employ the two-line method.
Each of these methods is equally effective. Choose the one you like the best, and feel free to modify it as I have. The important part is that you're keeping track of your funds in a way that makes sense to you.
Also be sure to balance your checkbook when your statement arrives. Go line by line on the statement and match every transaction to the entries in your register. Check off everything that matches and then compare the balance in your checkbook (for the last transaction listed by the bank) to the amount on your statement.
If they match, you're done. I usually draw a line in my register under the last checkmark and write "OK." If they don't match, look for an unchecked item that may not have posted to your account before the bank printed your statement and adjust your calculations accordingly. For instance, if a $10 transaction didn't post, minus $10 from your register total and that should match the statement balance.
The bank might also show a transaction you don't have recorded. Check your receipts—I recommend you keep them until you've reconciled your statement each month—to see if you forgot to log it. If you didn't, call your bank right away, to find out if it's an error or a fraudulent charge, and have it corrected.