Do You Balance Your Checkbook?
Now there’s a basic question…do you balance your checkbook? Do you reconcile your credit card statements and other bank accounts?
Last night the money conversation at home got a little heated as we started talking about balancing the checkbook. I am a micromanaging, balance-it-soon-after-it-comes kind of person. I find it a very important step in managing my money with respect. It also gives me the opportunity to catch any errors I or the bank made in a timely manner and get them resolved. My partner, on the other hand, while she is very meticulous and conscious with her money is not nearly as called to balance her checkbook as frequently. So, when she does do it several months later it takes hours. I admit, it drives me crazy (and she knows it). It is at this point, I practice what I coach & choose unattachment.
You simply can’t practice good stewardship of your money if you don’t balance your accounts. Whether you have online accounts, automatic downloads, or not, you still need to take a few moments each month and put your eyeballs on it.
As I was doing some Googling on this topic for the post, I came across an old article from the NY Times (circa 2006) and the quote made by this professor is just plain irresponsible. Attitudes like his are partly responsible for the state of consumers in the mess we see today with credit cards and mortgage problems:
As Lewis Mandell, a professor of finance and managerial economics at the State University of New York at Buffalo, sees it: “Some people don’t need to balance their checkbooks. If they have sufficient assets and overdraft protection, there’s no real need to worry about balancing their checkbook.”
For those who have a pretty good idea of what is in their account and how much they spend every month, laboriously going through every statement can be just a waste of time, he said.
“Today’s technology makes it so difficult,” Professor Mandell said. Before direct deposits and, particularly, debit cards, checkbook records consisted pretty much of deposits, cash withdrawals and checks written for largish sums.
Excuse me? Kinda sorta idea of what is in your account? What about all those overdraft protection fees? What about overdraft protection that just throws it on your revolving line of credit?
Who among us hasn’t written a check and not recorded it? Who hasn’t gone to the ATM or point of purchase machines, used the debit card, and then lo and behold there is no paper in the receipt dispenser so you walk away without a receipt and never write it down? While these might not be thousands of dollars of errors, you stand no chance of ever being in integrity with your money if you don’t ever actually sit down and look at the details.
How we treat our money is a direct reflection of how we view our selves and also impacts our ability to create and build wealth in the future. If you find yourself struggling with debt or frustrated trying to create more financial abundance in your life and you’re not being a good steward of your money you need look no further (at least to start).
I am sure there are a myriad of reasons people don’t balance their checkbooks and other accounts – the excuses range from “no time” to “don’t know how” to pure laziness. Again, they are only excuses. If you find time to brush your teeth daily and take out the garbage, you can find 30 minutes every 4-6 weeks to balance your accounts. And, if you don’t have that kind of time, hire a bookkeeper.
If you feel ashamed because you are unsure how to do it, don’t fret. Perhaps you are simply intimidated or no one taught you how as a kid. Now, as an adult you are feeling too much shame to ask for help. Don’t! There is no shame in asking a question and learning at ANY age. Here are a few tutorials on how to balance a checkbook:
How about you? Do you regularly balance your checkbook and accounts? Do you avoid it and if so, why? Any success or horror stories either way? Would love to hear from you in the comments.
Paula Gregorowicz, owner of The Paula G. Company, works with women who are ready to create their lives and businesses the way the want rather than how they were told they “should”. Ready to learn how to achieve success on your own terms? Download the free 12 part eCourse “How to Be Comfortable in Your Own Skin” at her website http://www.thepaulagcompany.com and Coaching4Lesbians blog.
…what’s a checkbook?
My main accounts are through an online bank. I pay bills electronically, including my rent and tithe to church. To pay my taxes, I had my bank mail me a check their computer printed out.
I log on to my accounts every day, where the balance is helpfully posted. Little sundry purchases (like lunch and candy bars and comic books) are paid for with cash I pull from my account when I buy groceries, a set amount corresponding to a line on my budget. No cash, no sundries.
Mind you, I’m one of the first people who can boast they had a computer in their home the day they were born, and I used AOL v1.0. I type 135 words per minute and handwrite 55wpm. The Internet is something I am ridiculously comfortable with. I understand intellectually that some people need the pen and paper checkbook register. But down in my gut, I don’t understand *why*.
Ah yes – I didn’t mean to imply checkbook as in physical register only!
I have almost everything online as well – yet there is an online statement & I reconcile it to my record keeping in Quicken monthly. I NEVER rely solely on the online register ala bank transactions. It never reflects checks not cleared, etc. and banks can & do still make errors.
I’m going to have to disagree with you and agree with Professor Mandell, whom you quoted in your post.
I do pretty much all my banking and bill payments online. I am fortunate that i do have sufficient assets and overdraft protection, and am not generally worried about not having enough money in my account to pay bills.
I do monitor my account frequently (it’s so easy to logon and check recent transactions), but that’s the only double-checking i do. If every charge looks familiar to me, that’s good enough.
I figure it’s not worth my time to be meticulous about this. By checking my account frequently, i would be able to catch erroneous fees and charges applied to my account. I’m not careless, and i believe i am “in integrity with my money.” But the specifics of balancing the checkbook (physical or virtual) don’t seem that important or necessary to me.
I balance everything religiously once a month when I pay my bills. It’s a snap now that you can download data directly into Quicken for most accounts.
But back when I had debt many years ago, it was a depressing thing to contemplate and I really let it fall off. It’s hard to believe that person was me.
I balance my check book – every morning! I walk the dog, make my coffee, sit at the computer and log into my bank account. I use Money Plus to track everything, which I update weekly – but I still use the old fashioned check register and an excel spreadsheet to track my balance, outstanding payments, budget, debt figures (going down!) and credit scores (going up!) When I was in debt and irresponsible with money (ie.in my 20’s) I never balanced my checkbook and never knew what I had – if the ATM gave me money, then I had it! The first thing I resolved when I straightened out my financial life is that I would always know exactly what I had – and spending a quick 2 minutes every morning to verify is an easy way to keep on top of things. My partner was much like yours, Paula, so I took over the function completely (we have combined accounts)
I balance my checkbook(s) and credit card statements about once a week. Because we generally run pretty close to the red line, I feel like it’s totally necessary. But more so, I just like to have a handle on it.
Paula: This is one reason why Jeanine and I keep our money separate. She’s nonchalant about things and I’m logging into my accounts almost daily.
Jean Chatzky at MoneySmart gives high marks to the “balance your checkbook” habit. She provides Five Financial Habits that Can Make You Happier and reconciling your checking account tops the list. She writes:
I work for a financial institution, and maybe because of that, I keep tabs on my finances daily. As things clear, I mark them off in my check register (which I keep with me all the time). I am constantly surprised by the number of people who don’t and run into trouble because of it (should I really be surprised?). I feel much better when I know exactly how much I have.
Though I have to work with Quicken/MS Money (providing tech assistance/troubleshooting), I’m not a fan of either program. Some people contact us when they have problems updating their accounts because that is the only way they know how much money they have.
At 25, I guess I’m kind of old-fashioned in that I’ll stick with my paper check register (okay…and use quick-glance programs like Mint, Wesabe, etc., to see where my money is going). 🙂
I balance my accounts in Quicken every weekend. It’s a habit that came in handy two years ago when a new credit card number wound up in the wrong hands and I found a few unauthorized charges the day after they occurred.
I haven’t always done this, mind you: it was a habit developed only after I finally began tackling my (now paid-off) debt head-on. Back then, it was definitely a way for me to feel more in control of my situation. Nowadays, it’s just one of those things I do every weekend, like the laundry 🙂
i’ve never balanced a checkbook in my life. i’ve never bounced a check.
at this point, i didn’t even get checks for my new bank account after moving across the country and needing a nationwide bank. i do everything online and check into my bank account several times a week. i’m still working on a bit of credit card debt after a lay-off, but i think i’m in pretty good shape at this point.
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I hope being straight doesn’t preclude me from posting a comment.;) Being Dutch, I’m not certain whether I have understood the post entireley, but never mind about that. To me, balancing our accounts is a matter of making a rough budget once a year, especially budgeting for all non-avoidable expenses: car insurance, all sorts of taxes, etcetera. You add them up, divide the total by 12, and everymont you put the difference in a (theoretical) “jam jar”. If the average amount is, say, € 1100, and the January amount is € 700, you put € 400 aside. Every month you add up what is in your checking and saving accounts, you make a list of what you expect in the way of bills, groceries, gas, and the expected bills (from your yearly plan), and either add to the “jam jar” (in case the next month has few bills) or take out of the “jam jar” (when it’s an expensive month). The net result shows whether you have spent more tha your income, or not. It’s best done in a spreadsheet, but we have been doing this since we married, now nearly 25 years starting just with a few sheets of paper per month.
I agree with what you are saying in principle, which is to be aware of where your money is going … but i never write checks anymore. So, utilizing your online account to track Pending (future) payments as well as those that have cleared seems so much more efficient. I check this daily and have caught bank errors and fraud. But … i don’t think you need to do any balancing down to the penny offline anymore when you have so much access to your live accounts online