How to Balance Your Checkbook

Need some training on how to balance your checkbook? There are two balances to keep in mind for this: the projected balance and the reconciled balance. The difference between these two are shown in the tutorial at the following link.

To explain how to balance your checkbook, let me give a quick example. Say you and the bank believe your balance in your checking account is $1000. Then you write a check to the cable company for $100. Until the cable company deposits that check, the bank believes the balance is $1000. You know that the projected balance is $900, though. Once the bank receives the check, they update the balance to $900, but unless you are watching your account balance 24-7, you are not aware that the bank has updated their balance to $900. When you log into your account (or look at the monthly paper statement) and see that the bank has taken account of the $100 check and update the reconciled balance in your check register, you have reconciled that check with your bank.

You may have noticed two balances spoken of above: the projected balance, and the reconciled balance. You will want to be aware of both balances, which will help you to not write checks that will cause your bank balance to go below $0. No fun dealing with that.

The tutorial above shows a checkbook ledger conveniently operated in an excel spreadsheet which keeps track of both the projected balance and the reconciled balance.

Keeping up with these 2 balances does not have to be difficult. See the tutorial at the link above. You can also purchase a checkbook at the below link which takes care of both balances for you conveniently in an excel file.