Do you find that one of the most difficult household record keeping tasks to perform is reconciling your checking account and keeping track of the checks you write and the times you use your debit card? I sure did and put it off for months and months until finally I had such a mess in my checking account that I had to close it and open a new one. I learned my lesson and solved some of the problems that caused all my frustrations.

I find using duplicate checks a very good idea because I always have a record of the amount of each check. Also, every time I use a debit card, I am careful to put the receipt in my checkbook. This serves as a reminder to update my check register. No matter what type of check writing method you use, it’s very important that you keep track of all your transactions in your check register.

When you get your checking account statement from the bank, keep it in a place where it won’t be forgotten. I usually put it with my bills to pay. That way I know I will remember to reconcile my account each month. If you throw it away in an unknown place, you will surely forget to balance your account later on.

Selecting a specific time to reconcile your account each month is a good habit to get into. I know that life can be very hectic at times and only you know when you will have enough time to spend without interruption. When you’re ready, gather your statement, checkbook, and check register along with all ATM transactions from the previous month.

With all that said, let’s get started! I’m going to make this quick and painless, I promise.

DEBIT: All money items charged to your account, including written checks, debit card purchases, ATM cash withdrawals, fees and charges.

CREDITS: All items of money deposited into your account, including deposits you make and interest you may earn.

Grab a blank sheet of paper and we’ll create a** worksheet for you to use to reconcile your account.

On the first line write: CHECKBOOK BALANCE: Next to that, write the amount of balance your checkbook says you have in your account.

On the second line write: BANK BALANCE: Next to that, write the ending balance shown on your bank statement.

On the third line write: FEATURED ARTICLES: Don’t write anything next to it yet.

Your worksheet should look like this:

CHECKBOOK BALANCE: $1,002.50

BANK BALANCE: $1,230.00

PENDING ISSUES:

Now, referring to your check register, place a check mark next to the items that have been cashed. You will find these items listed on your bank statement. When you’re done, go back through your check register and look for the items that aren’t checked… put an “O” next to all of those items. These are your “Featured Articles”.

Next, list all the items that have an “O” next to them under the Outstanding Items line, and then add them all up. Add a line for this total… Total Outstanding Items.

Now your worksheet should look like this (example):

CHECKBOOK BALANCE: $1,002.50

BANK BALANCE: $1,230.00

PENDING ISSUES:

Check #123 $15.00

Check #126 125.00

Check #130 90.00

Total pending items: 230.00

Subtract from bank balance: $1,000.00

The example shows that there is a discrepancy between your checkbook balance ($1,002.50) and your bank balance ($1,000.00) of plus (+) $2.50. So now you have to go hunting and find out why. Yuck!

So… ask yourself:

Did I add or subtract correctly? You must check it out.

Forgot to add an article? Check the sequence of your checks. Are any missing?

Did I forget to deduct an ATM service charge? Check all of your ATM deposits to make sure you have subtracted each fee.

Did I forget to deduct my bank service charge? BINGO THAT’S IT! And it was $2.50!

You have reconciled your account and are IN BALANCE with your bank!

Draw a red line below the last balance on your checkbook register and write “On balance and date” so you know this is the last time your checkbook matched the bank statement. Do the same on your bank statement as well. believe me; it will save you a lot of headaches, in the future, when you have difficulties trying to reconcile your account. This way you only have to go back to the previous red line.

** Typically on the back of your bank statement is a worksheet similar to the one we created above. You can certainly use that to reconcile your account. Simply apply the same principles outlined above.