How Often Do You Balance Your Checkbook?

I saw a tip the other day where a personal finance blogger said you should "balance your checkbook as often as you can." I'm not sure what this meant. Balancing a checkbook isn't something you determine the time frame for, is it? Isn't it something you do when you get your bank statement?

I suppose you could go online, see what had cleared, and balance your account as often as you like. But this seems a bit like overkill to me.

I balance our two checking accounts (they are both joint accounts -- one at a bank and one at a credit union) each month when we get the statement. It takes about three minutes using Quicken. Nice and simple. And as you might imagine, I balance to the penny. In most months, it's no problem. But maybe once a year I'm off by 10 cents or so and have to hunt down a problem check. But it usually works out without too much angst.

So here's my question for you:

How often do you balance your checkbook?

Or maybe I should be asking "do you still have a checkbook?" You tell me. ;-)

Comments

[Rick Francis]

>you should "balance your checkbook as often as you can." >I'm not sure what this meant.

I suspect what he really means isn’t just checkbook but calculating your available cash:

Available Cash = Bank Balance – all liabilities.

When I was in college I kept a very close watch on that number using a check book ledger. Every time I charged something on my credit card I immediately entered it into my check book. That way when it came time to pay off the CC balance I was sure I could write a check for it. I always knew how much I could spend so I could decide if I could afford something. In grad school I extended things by entering all the fixed monthly expenses at the beginning of the month- and used a computer to take care of the math.

-Rick Francis

[Jonathan]

I was never clear on what it means to "balance the checkbook" - I got my first checking account in 2002 when I started college, and I've always had access to the account online. I don't keep a written "check log" but I do have a spreadsheet that I primarily use for projecting FUTURE balances so I know how much I can invest. Since I started paying more attention to money after graduation, I log into my account nearly daily. I know immediately when a check clears or if something doesn't add up. I only have around 8 transactions per month, and all but the 1 or 2 checks a month that I write are automatically deposited or withdrawn, so this is very easy.

I track my credit card balance just as frequently.

[Bryan]

I'm with Jonathan. I have never balanced my check book. I could tell you the balance at any given time within $50, and never allow the account to go low enough that I have to worry about hitting 0. Between that and checking balances online nearly daily, I've never felt the need to keep a balance ledger.

[Wayne]

I balance my checkbook 2-4 times a month. I use the Quicken reconcile feature. I am not diligent in entering my account movements as they happen. I have a general idea of how much money that I have. The reconcile feature helps me make sure that all my account activities have been recorded.

For many years I had to deal with checks and credit cards from American dollar and the Brazilian Real for both personal and business use. I needed to balance my account as it was easy to skip an entry.

[DCS]

I thought balancing was adding all the deposits and withdrawals in the register to get the total available funds in the account as of today. I do that every few days with my main checking account when I download the transactions to make sure I'm not running short of short-term funds to avoid overdrafts and such. I don't do that with savings accounts that generally only receive deposits and have no withdrawals, or for retirement accounts. For those, the balance is not a daily concern.

Comparing the bank's statement to the account register is reconciling. I do that once a month when the statement comes out for all bank accounts. I usually reconcile investment accounts quarterly when I check to see if I need to adjust the deposit ratios (to rebalance the allocations).

[billyjobob]

I balance mine everytime I make a payment or a deposit. I thought that was the norm. I have everything in Microsoft Money and I also keep the little booklet ledger. I could probably lose the booklet.

[Steve Myers]

These are very interesting comments. I do financial counseling and teach others to balance their checkbooks, budgeting, etc. Personally, with the wonderful online access and real time posting of most banks, I balance my checkbook every weekday. It takes about one to three minutes. Why? I use a debit card for most purchases and the bulk of these are online (if I trust the site, if not I use PayPal). There always is the present danger of security, thus keeping a daily watch will catch it immediately. A close friend had his credit card scanned by a criminal one day and it became a nightmare. He didn't catch it for a week. Lesson learned.

I do suppose that if your checking account or debit card is used only occassionally and you generate a very low volume of transactions, there is no need for daily checks. But, I believe the day of once a month statement is over. This is a new order today and even at 71 years of age I firmly believe staying on top of everything.

[Steve Mertz]

I never balance my checkbook, that's my I have online banking. A quick glance and I'm good to go.

[JP]

I used to keep a ledger balance in my checkbook before college.

Now I watch my balances online like a hawk instead.

[Kurt]

I never balance the checkbook. We record checks and other withdrawals from our checking account into our personal finance software. Whenever I'm logged in our bank's website, I check to make sure my balance matches the bank's balance, and investigate if it does not. So I guess that's what constitutes 'balancing the checkbook' now. I don't have any schedule for doing this, but it probably happens naturally 3-4 times per month.

[Bad_Brad]

Every month when I get my statement. Although it takes much less time than it used to. I used to put every expense on the debit card or write a check. Today I use a credit card to get rewards and then pay my balance. I have maybe seven or eight entries per month total in the checkbook - two paychecks, the mortgage, the van payment, two checks to Church for our monthly tithe, and maybe one or two ad hoc items (ATM cash, etc). So the bulk of my time is reconciling the credit card statement to my budget (which is in an MS Excel model). Reconciling my checking account statement to my checkbook is a trivial (five minutes or less) exercise each month.

[tom]

What's a checkbook?

[Old Limey]

On the 1st. or 2nd. day of the month when I get an e-mail telling me our account statements are available I download and print them out. Then I reconcile them with the entries in the checkbook registers. This way if there's a check that hasn't been cashed or hasn't been entered I mark it as such so that I can keep our accounting accurate. I also add in the small amount of interest we receive in our checking accounts. We work as a team - I handle the finances, investments, taxes, insurance, cars, gardening, and home maintenance - she does everything else, especially our personal relationships with family and friends. She is a compassionate "People" person, I am a nitpicking "Numbers" person. Our system has worked flawlessly for almost 56 years. Of course, it has become a lot easier for me since the introduction of computers.

As soon as I am notified of a bill I enter it into Bill-Pay and make a note of it on my desk calendar. Then about twice/month I figure out how much I need to move from Savings to Checking, also doing this for my wife, after asking her for an approximate idea of what checks she plans to write this month. For me, a desk calendar is an absolute must for ensuring that nothing slips through the crack, it's especially important as you get older and your memory isn't as good as it used to be. One thing I like about my Credit Union is that if by some chance there was insufficient funds in either of our checking accounts to pay a bill, it would automatically perform a transfer from savings, fortunately it has never been needed. For credit card payments I schedule them to be paid the day before they are due and have never had a problem. We have always had separate accounts even though they are both joint.

[MC]

I used to hand balance my checkbook to the penny every month when my statement came, and I also kept an onrunning tally in my checkbook. I used to keep about $1500 extra in my checking account as a "buffer" to prevent accidentally bouncing a check.

But now I keep as little $ as possible in my checking account ($50) because it doesn't pay any interest. To keep from bouncing a check, I don't write any checks (instead I pay for everything with either cash or a credit card). I keep a checking account tally in an excel spreadsheet that I check twice weekly against my bank's online site for accuracy using Mint. At the same time I also check all my credit card charges and investments. I pay my credit card and other bills each month from my checking account using my bank's bill pay system, and I update my excel spreadsheet at the same time.

[David]

I balance my "checkbook" almost everyday. At most I might let it go a three days. I use GnuCash to track the data. I enter any new transactions and verify the balances using online account access. When I get the monthly statements, I reconcile the accounts.

[jonmyers]

I agree with Steve Myers (no relation!). I reconcile with my Checking and Credit Card accounts daily/every other day with my software (YNAB). Either in the morning, or at night. Takes no more than 5 min.

I might take an extra 30 min at the end of the month to tweak the budget for next month, but that's it. No 'balancing' so to speak. The daily reconcile online has deemed that useless.

[Jeff]

My definition of "balancing" is what Quicken would call "reconciling," and at this point I'm lucky to do that every quarter. I look at my account balance a couple times a week and get notified if my balance gets low. Back in the day when I was a complete personal finance geek I used to look forward to the day when my bank statement arrived so that I could balance/reconcile my record of the transactions to that of the bank. Now when I reconcile in Quicken I download the bank's transactions and compare them to the bank's transactions, and shazam, it balances every time! Isn't technology great?! I actually uncovered a bank data entry mistake ~20 years ago doing the old school paper and pencil balancing. It’d be extremely unlikely for me to catch that today, but in fairness it’d be less likely to happen in the first place because most of my transactions are electronic.

[Squeezer @Personal Finance Success]

The wife and I have a joint checking account but I handle all of the money. I get paid every 2 weeks. As bills come in for the month, I jot them down in notepad++, and when I get paid, the bills get paid and I match everything up with my bank's online checking. Whatever is left over gets put into the savings account or investments. Should I need some cash, I transfer from savings back to checking (instant transfer) and go to the ATM.

[Matt]

We had problems when we first married because my wife did it differently than I did. I balance the check book and rarely have a problem.

Now with on line banking it is easier to check up on things and when they clear so my need to officially "balance" a check book had become rare.

[Dee]

I think you should check your accounts every day or every other day. If there has been fraud (someone stolen your account number and spent your money) and you don't notice for 30 days, you may not be able to get your money back.

Isn't there a time frame for fraud liability? Like two days?

[Jim]

I still use a checkbook register, and balance the account monthly. We have 3 checking accounts (mine,your,ours). "Yours" never gets balanced but there never seems to be a problem. :)
"Mine" and "ours", I balance each month when the statements come available. I am starting to use Quicken, but I'm still stuck on balancing the old fashion way. It really only takes me a couple of minutes...not hard when you've been doing it monthly for years. But I should really put the effort into using Quicken more. I hardly ever write out checks anymore, just for R/E taxes, gifts and charities. Everything else is online.

[Bruin]

Like FMF, I balance monthly in Quicken when our statement comes. We don't use a debit card, so less danger for us security-wise.

[CA]

I never balance my checkbook. In fact, I rarely use checks anyway. I use cashback credit card for most of my expenses (and pay it off weekly). All of my accounts are online. I have a once-a-week routine where I check, reconcile accounts, and pay off credit card bills. This way, I don't have to think when bills are due. It's all routine. Checking account always have $3000 minimum, savings have $5000 minimum for unexpected large expenses.

[Pam]

I balance every couple of days using Quicken. I have caught 3 cases of fraud that way.

I think that responsible people who live paycheck to paycheck probably online balance more often to prevent over draft fees.

[JB]

I've never balanced. I use online banking and rarely write checks (one or two a month).

It's easy enough just to log-on and see what has cleared your account.

[Therman]

I was under the impression that balancing your checkbook meant making sure your checkbook was current with your bank transactions at all times. I am blown away by this. I thought all people who paid attention to their finances all do things the same as me. I have an app that I enter my transactions into every time something happens. My app gives me the most real-time snapshot of my account standings (checking, savings, small business account, retirement accounts, flexible spending accounts). The reason I don't trust online banking is because of all the "balances" they show (current balance, bank balance, avail balance, daily balance etc...). Gimme a break, just tell me how much money I currently have (that's what drove me to get the app).

My ultimate goal is to create the month buffer (YNAB) and then do each and every transaction necessary on the first of the month and never look to the accounts again until the first of the following month.