Money Matters: Are You Balancing Your Checkbook?
If you aren’t balancing your checkbook or even checking your bank statements, you might be missing fees that banks are charging. They are hoping you don’t balance or look over the statements. Now that most everything is online and many people opt out of paper statements, it’s harder to see if fees are penalties are being assessed to your account.
Balancing a checkbook is easy…something we all learned in grade school, or should have learned. Do they still teach it now? All balancing the books means is tallying the deposits and purchases and matching them to the statement. Simple, right?
- Step 1: Get a copy of your monthly bank statement or look at it online if that is what you have opted for.
- Step 2: Compare your statement to your checkbook register. Throughout the month, you should have been recording every deposit and purchase or withdrawal. If you see any charges or deposits on your statement that aren’t in your register, add them.
- Step 3: Record any fees or balance adjustments that may appear in your statement.
- Step 4: Subtract from your register’s balance any checks you have written but that have not yet cleared the banking system.
- Step 5: Check and see if the total matches your statement. If it does, your account is balanced. If not, go back through your register and see if you’ve missed anything or if you’ve made a mistake with your math.
Consider using financial management software. There are many out there that allow you to record purchases as you make them then, at the end of the month run a program that takes your statement and walks you through the process!
Now, what about overdraft protection? It happens to everyone…the bounced check.
Overdraft fees on bounced checks can be very costly, with most banks charging $25 to $35 for each one. It’s not unusual for someone to miscalculate and bounce a number of checks in a row. Note that the new law limiting the overdraft fees customers can be charged applies only to ATM withdrawals and debit card purchases, and not to checks.
Fortunately, there are some remedies when this happens. Most banks will offer a line of credit that will kick in when you make a charge that exceeds your balance. These are like credit card charges, with interest, so be sure to pay them off as soon as you can. Sometimes a bank will waive an overdraft fee when asked. They usually do so only if the overdraft was a rare occurrence. In other words, if you have a habit of bouncing checks, they’re not likely to cut you a break.