Balancing a checkbook is easy. The task involves recording every withdrawal and every deposit you’ve made in the recent past and will make in the near future. Once you’ve done so, you’ll need basic math skills and a few minutes each day or month to verify the accuracy of your work and to calculate a running balance.

And it’s important to do so for two key purposes:

1. To know how much money is actually available in your checking account at any point in time — partly so you don’t overdraw your balance; and

2. To reconcile your checking account with your bank statement, which allows you to spot errors (or even fraudulent activity) and to account for any transactions you may have overlooked in your bookkeeping.

Read on for instructions on how to balance your checkbook (including a visual example) and reconcile your bank statement through both traditional and modern methods. You can also get tips for using your check register and keeping an account in good standing.

How To Balance Your Checkbook

To keep track of how much money you actually have in the bank in order to avoid surprises and costly fees, you should keep an accurate running balance of your account at all times. And there are two main avenues for doing so: 1) maintaining a paper check register, or 2) leveraging mobile and online banking tools.

Realize, however, that while electronic banking has expanded your options for this process, the new era of automated payments has also complicated record-keeping procedures, which now require the ability to anticipate recurring and “digital check” transactions. We’ll address that issue in more detail in the “” section.

For now, you need to grasp the following methods for keeping track of your account activity:

• Record transactions, including checks, in your checkbook register as you make them (see next section for instructions).

• Get a book of “duplicate” checks that allows you to keep a carbon copy of every check you write.

• Save your pay stubs as well as receipts of ATM withdrawals (making a note of ATM fees), debit card purchases and deposits.

• Use online bill pay and record recurring/automatic payments in advance.

• Review your monthly bank statement or online banking history to get details on fees and interest payments, if any.

Periodically, you’ll need to sit down with these records and sum up the transactions to reconcile your bank statement. The next two sections discuss both old and new ways of doing so.

How To Use A Check Register

A check register is like a diary of your checking account activity, and every box of checks you order from your bank will come with one. You use it to record every incoming and outgoing transaction in your account. This method originated from a time when writing checks was the primary way of making payments out of your checking account. But it’s nonetheless still a useful tool. Keeping track of all your account activity and maintaining a running balance gives a good idea of how much money is in your account at any given time.

If you prefer this pre-digital-era method and want to be thorough in your bookkeeping, follow the steps to using a check register below while referring to the visual example:

1. Enter transactions in the white rows of your check register while they’re still fresh in your memory. Use the gray rows to add a memo or transaction category under the “Transaction Description” column and to enter your new running balance under the “Balance” column. As you do, keep the following rules in mind:
   • Amounts for checks you issue, debit card purchases, ATM withdrawals, ACH payments you make, outbound wire transfers and bank service charges go under the “Debit (-)” column. Every time you make a debit entry, subtract that amount from your prior balance, and record the difference in the “Balance” column.
   • Amounts for cash or check deposits, direct deposits, interest earnings and incoming transfers (ACH or wire) go under the “Credit (+)” column. Add these to your prior balance, and record the sum in the “Balance” column.

2. Every month — or sooner if you wish — you need to reconcile your own records against your bank statement. You can do this by comparing your check register against your monthly bank statement or online banking history.