How to Balance a Checkbook

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Balancing a checkbook has become something of a lost art in this era of digital access to accounts, online bill payments, debit cards, and other forms of electronic money. In fact, some people have done away with actual, physical checkbooks entirely by paying their bills entirely online, with debit cards, or by automatic payment.

Knowing how to balance a checking account is still important, maybe even more so in this era of e-money. It’s vital to know what’s in your account and where your money goes each month, since it’s the only way you will know for sure how much money you have, avoid overdrafts and completely understand your financial situation.

With all of that in mind, here is how to balance your checkbook in five easy steps:

Step 1: Keep Records

You must keep records of all of your deposits and purchases if you want to have any hope of balancing your checking account. This means that every time you use your debit card, write a check, deposit a check, make a withdrawal, transfer money, or make automated payments or deposits, you need to record it in your check register. Write them in exactly, since exact amounts are key to balancing your account. If you use an accounting program or app, like’s free money management tools, these amounts will be electronically recorded for you, which will help you stay organized if you forget to write something down.

Step 2: Obtain Your Bank Statement

It seems obvious, but this is a vital step. Many people never even look at their bank statements, especially when they’re paperless and sent via email. It’s vital that you access and save your statements, even when they’re electronic. If you’re not sure how to get your statement, log into your bank account and check under “settings.” There is usually an option there to get your statement by mail, by email, or by both. Depending on your financial institution, you might also be able to integrate your statements with your accounting software, so that your statement automatically gets aligned with the records you’ve been keeping. Quicken has software tools that aggregate all your account information for you into an easy-to-read format.

Step 3: Find the Last Transaction

It’s important that you understand where the statement ends and when the bank stopped figuring amounts. This will be a specific date and time, and your statement will have this marked at the top for your information. You’ll also want to look for the last transaction to determine whether it’s a payment or a deposit. This will let you know the window of time that you’re looking at and give you the baseline figure from which you can balance your checking account. Record the balance that is at the last transaction on your account and then compare that balance to the one that’s after the same transaction in your records. If the number is the same, lucky you! Your account has balanced. If it’s not, however, it’s time for the next step.

Step 4: Check What’s Cleared and What Hasn’t

The fact is, not all payments or deposits from or into a checking account clear immediately, and you’ll need to determine the status of all pending transactions in order to balance your account. Go through the statement line-by-line and check off which payments and deposits have cleared, and which are still outstanding. If you’re using software, you might be able to do this electronically. If not, you’ll need to do this by hand. It’s somewhat tedious but it’s at the heart of balancing a checkbook, since you need to know exactly how your records match up with your bank’s.

Step 5: Subtract or Add as Necessary

Here’s the tricky part. If you have any deposits that haven’t cleared, you’ll need to subtract them from the bank’s balance. Likewise, if you have any payments that haven’t cleared, you’ll need to add those to your bank’s balance. You’ll also want to look at your bank statement for any fees that might have been applied to your account such as, overdrafts, ATM transactions, or monthly surcharges. Then, subtract these from the balance in your checking account to bring the two balances in line with one another. Ideally, once you’ve done all this, the balances should match exactly. If they don’t, it means that there is an error somewhere, and it’s usually going to be something you left out of your records. Go back over step 4 and 5 until you get the balances to match.

Congratulations! When you’ve made it this far, you’ve balanced your checking account. You’re all set — until you have to do it all over again in a month.

Vivian Wagner is a freelance writer in New Concord, Ohio. Vivian blogs via