A checking account is an important tool for managing money. It’s useful for paying bills, depositing paychecks, sending money, and making purchases using a linked debit card. Most adults in the U.S.—81%—have at least one bank account. If you’re one of them, it’s important to understand how to balance a checkbook to keep track of debit and credit transactions.

How To Balance a Checkbook Using a Check Register

When you open a new checking account, your bank may provide you with paper checks as well as a checkbook register. This register is where you can record the various credit and debit transactions for your account, including:

• Direct deposits
• Mobile deposits
• In-person deposits (made at a teller or an ATM)
• Online bill payments
• Cash withdrawals
• Checks written
• Debit card purchases

You write your starting account balance at the top of the register. As you add or deduct money from your account, you write down each transaction in your checkbook register. Specifically, you should include the transaction:

• Date
• Description (grocery purchase, bill payment, ATM withdrawal, etc.)
• Amount

You add or subtract the corresponding amount to arrive at your new account balance. This can help with balancing your checkbook at the end of the month.

To do that, you need your bank statement. Reconcile it against the information that’s listed in your check register. This simply means going through your statement and your checkbook register line by line and matching up transactions.

Assuming all the transactions from your statement and your register match, the end balance showing for each one should also be the same. If not, you need to go back and check the register for any transactions that may not have been posted to your account yet. If you want to match your current account balance to the balance showing on your bank statement, you can do that by factoring in transactions posted after the statement date. Once you add back withdrawals or subtract deposits, your current balance and statement balance should be the same.

How To Balance a Checkbook Without a Check Register

Writing down transactions in a checkbook register is one way to keep track of them, but there are also options for balancing your checkbook digitally.

Online and mobile banking

Nearly 40% of Americans rely on mobile banking to manage their money. If your bank offers online banking and/or mobile banking, balancing your checkbook may be as simple as logging in to your account.

Once logged in you can quickly scan your:

• Current balance information
• Available balance information
• Debit transaction history
• Credit transaction history

You may prefer online and mobile banking for checkbook balancing if you don’t write paper checks or only write a few each month. Keep in mind that checks won’t show up in your transaction history until the transaction has been posted, so you still need to keep track of those amounts when calculating your current balance.

Budgeting apps

Budgeting apps are another option for managing checking account activity. These apps link to your checking and other financial accounts (including credit cards and savings accounts) and automatically record new transactions for you.

You may prefer using a budgeting app if you have multiple bank accounts or credit cards, as it’s easier to see them all in one place. Relying on these apps alone to balance your checkbook can be problematic, however, if you’re not keeping a close eye on each account individually.

Spreadsheet or ledger

Using a spreadsheet or ledger can also help you stay on top of your checking account balance. With a spreadsheet, you can record deposits and withdrawals while creating formulas that automatically repopulate your current account balance. The key to this approach is making sure that you enter new credits and debits in a timely manner. Otherwise, you might forget about a transaction, which would result in an incorrect balance.

Ledgers are another way to record banking activity by hand. Using a ledger is similar to a checkbook register. You simply write down transactions as they happen, adding or subtracting the appropriate amount from your balance. At the end of the month, you compare the ledger with your account statement to balance your checkbook.

Why Balance a Checkbook?

Balancing a checkbook can seem like a tedious and time-consuming task, but it’s worthwhile for two reasons.

You know where your money is going

First, keeping a balanced checkbook means you know where your money is going each month and how much is coming in. This can be helpful for making and sticking to a budget. More important, tracking your balance can help you avoid the possibility of having an overdraft in your account. Considering that the average overdraft fee is around $35, it is better off avoided as much as possible.

Preventing fraud

The second benefit to balancing a checkbook is fraud prevention. When you’re checking your account statements and transaction history regularly, it’s more likely that you’ll be able to spot any suspicious transactions. For example, a small deposit of a few cents or a $1 debit transaction could be evidence of a scammer testing the waters before launching a larger-scale attack on your account. Taking time to balance your checkbook could help you avoid financial headaches caused by fraud.