Why You Should Still Balance Your Checking Account Even if You Don’t Write Checks

Check writing, though in decline, isnt dead yet. However, there’s a good chance that, no matter how you pay, you might not be balancing your checking account.

The ability to use apps to check your account balance on your phone, and the rise of artificial intelligence apps to tell you when your funds are running low, might make it seem as though taking the time to balance your checking account (and other accounts) each month is an unnecessary task.

Don’t be so sure that you don’t need to balance your account, though. Even if you never write another check--or use a check register--again, you should consider balancing your account.

Why It’s Important to Balance Your Checking Account

With all the automation available, it’s easy to feel disconnected from your money. However, that separation between you and your finances can cause problems. You might not be carefully tracking your spending or putting your money where it will do the most good for you.

Balancing your checking account forces you to sit down, review your transactions, and think about your money. It’s a way to connect to your finances regularly and see exactly what’s going on. Going through your transactions one by one gives you a better feel for your money than just looking at a pie chart on occasion or checking in with your balance before you make a purchase.

On top of giving you a close connection to your money, balancing your checking account also helps you:

Identify fraudulent transactions
Verify the amount of money you spent on each transaction
Catch things you might have missed
Make sure scheduled bill pay transactions have gone through
Follow up with expected direct deposits and other income

You might be surprised at the mistakes that can slip through the cracks when you aren’t paying attention. Sometimes, bill pay transactions don’t go through as expected, and you might not catch it if you’re not paying attention. Additionally, without balancing your account, you might not notice if payroll makes a mistake and doesn’t deposit the full amount you’re owed for a bonus.

Taking the time to balance your checking account gives you the opportunity to verify each transaction, dispute fraudulent items, and avoid bigger problems down the road.

How Do You Balance a Checking Account Without A Check Register?

In 2020, things are a little different than they were 20 years ago. Without a checkbook, there’s a good chance you’re not using a register. Plus, debit card purchases and cash withdrawals from banks are difficult to record in a register when you aren’t carrying a checkbook around everywhere.

So, how can you balance a checking account without a register? Well, it’s actually not too difficult, especially if you use some sort of software.

In order to balance any account, you need to keep track of each transaction you make--and do it independently of the financial institution. The whole point of balancing your checking account is to keep your own records and then make sure they match the records of the bank.

You can use a spreadsheet to keep track of each transaction, or you can use personal finance software to help you keep track. It’s even possible to create your own ledger. Keep track of your transactions by bringing receipts home and entering them each day, or take a picture of receipts with your phone and use them to remember your transactions later. No matter how you do it, the important thing is to note every expense and income transaction.

Once you have that information somewhere, you can compare it to the statement you receive from your bank or credit union each month.

How to Properly Balance Your Checking Account

When balancing your checking account, the important thing is to make sure everything tallies. You pull out the record of transactions you made during the month, whether you’ve done it using paper and pen in some sort of ledger, or whether you have it on your computer.

Some personal finance software programs come with features that allow you to select when you’re balancing an account. All you have to do is put the date of the bank statement and then you can start.

Review your deposits: The first thing your statement will list is all your deposits. Compare the deposits on your bank statement with all of the deposit transactions you recorded yourself. If you’re using a pen and paper ledger, put a tick mark next to each item. If you use a spreadsheet, you should have a column you can use to mark off transactions. Personal finance software allows you to check off verified transactions as well.
Verify your debit card transactions: Next, your bank statement will list all of your debit card transactions. Compare them with your own records, marking them when they match up. ATM withdrawals will be listed as well, so make sure you’ve kept track of those in your records so you can make an accurate comparison.
Compare any written checks: If you do have some written checks, compare them with what has come through the bank. If a check hasn’t cleared yet, you’ll need to make a note of that because you don’t want to overspend later.
Review fees and interest: Pay attention to whether your bank or credit union charges a maintenance fee. You might also have been charged an overdraft fee if you spent money that wasn’t quite in the account yet. Take a look at how the bank charges these fees, and consider changing banks if you’re paying too many fees. Additionally, if you’re paying overdraft fees because of the order your bank records debits and credits, you might need to adjust how you manage your spending.
Compare your total and the bank’s total: If there are major discrepancies, go back through to see if you can find where the problem is. Additionally, if you notice a purchase that you’re sure you didn’t make, contact the financial institution immediately, since that could be a sign of a fraudulent purchase, indicating that your account might be compromised.

Balancing your checking account shouldn’t take too long. Set up a specific time each month to balance your account--and even consider balancing your credit card accounts as well--and it can add another layer of safety to your personal finances.

Best Tools to Make Balancing Your Checking Account Easier

One of the best ways to make balancing your checking account easier is to download personal finance software without connecting it to your bank accounts.

Personal finance software like YNAB, Mint, Quicken, and Personal Capital can all be used without connecting to your bank account. It might seem tedious to enter items on your own, but the reality is that keeping your own separate records can help you spot problems while giving you a closer connection with your money. Depending on the software, you can schedule recurring payments and deposits to be reflected automatically, as well as set up to balance your account.

Your online account access should allow you to view your statement online. You can pull it up and set it up side by side with your personal finance software (or your spreadsheet) so you can compare items as you go.

While you still might want to check your account using the mobile app regularly to make sure your most recent transactions are accurate, there’s still a lot of value to be had from balancing your accounts. Make a monthly date with your money to balance your accounts, and you might be surprised to see how you can improve.