Woman at a desk balancing her checkbook

What Is Balancing a Checkbook?

Some people track how much money they have in their bank accounts by relying on their memories. They believe that they will remember every transaction they make, every transaction that automatically comes out of their account, and approximately how much money is available in their checking account at any given time. But what happens if you can’t remember? What happens if you end up overdrawing your account because you have less money available than you thought? If this describes you, it might be time to learn how to answer, “What is balancing a checkbook?”

In short, balancing a checkbook is documenting how much money is in your bank account. This document should include all deposits, withdrawals, fees, or any transactions made on your account that affect your balance, starting from the day the account was first opened. If your records don’t go that far back, it’s not a problem. You can begin to balance your checkbook from any point where you can confirm that the amount you have available matches the amount the bank says is in your account.

Some companies, such as Intuit QuickBooks, can help you balance your checkbook by keeping track of all your bank transactions. Unfortunately, programs like these can be costly. Fortunately, balancing your checkbook is something you can do on your own. 

Did you make a resolution that you would stay on top of your finances? If yes, or even if you just want to be better at tracking your money, it’s good to know that confirming how much your bank claims is in your checking account is relatively easy.

Of course, if you don’t know what  balancing a checkbook means, then you likely don’t know “How do you balance a checkbook?” Here’s some info that could help. 

What Is the First Step In Balancing a Checkbook?

You will need to take a few steps to find out how much money is in your account and if the information you have matches the information the bank has. But what is the first step in balancing a checkbook?

The first step you must take is to create a checkbook register where you keep track of all transactions. These registers typically are included when you order checks. If you aren’t ordering new checks, just ask for one. Your bank may provide one for free or for a minimal charge. If you prefer, use a spreadsheet program (think Excel or Google Sheets) to track the money in your account.

How Do You Balance a Checkbook?

Once you have a check register and understand what balancing a checkbook means, here is what you need to know to answer the question, “How do you balance a checkbook?”

First, you should record all transactions in your register when they occur. If you’re making an ATM withdrawal or depositing money in the account, for instance, write it in your register. You can keep a running balance.

After you create a checkbook register with a running balance, you will need to reconcile it with your bank statement. The steps of balancing your checkbook are:

Have your bank statement available

Your bank will send you a statement every month, showing all the transactions made during a specific period. Some banks send these via snail mail, and others send them electronically. Whether looking at a paper document or information on your computer, you just need to ensure that you have it in front of you so that you can compare your records to the bank’s.

Record your beginning balance and any transactions made

It’s preferred that you keep a record from the day you open your account. However, you can still confirm how much money is available as long as you have a verified balance to start with. Any transactions you record will only be those that occurred after that balance amount was established. Generally, if you can’t begin tracking from the day you opened an account, it’s probably easiest to use the ending balance from the previous month. Verify that the balance amount you are starting with is the same amount the bank shows.

Add interest earned to your checkbook

Some checking accounts enable you to earn interest on the money in your account. Almost all banks that offer this require you to maintain a minimum balance. If you are fortunate enough to earn interest, you must add this amount to your check register. Once this information has been added, verify these transactions against the bank statement.

Subtract any service charges or fees

If you are charged a monthly service charge, a fee for using an ATM, a fee for insufficient funds (not having enough money in your account to cover a transaction), or any other miscellaneous charges or fees, these amounts must be deducted from your balance. In your checkbook register, you will record such services and fees, but it’s vital that each transaction is entered on its own line. If you group them together, you might not remember how you came up with the total amount. After all charges and fees are accounted for, confirm that the bank charged you the same amount you recorded for each.

Review all your deposits and withdrawals

You might have your paycheck automatically deposited into your bank account. You will need to record this in your checkbook register. That check that your grandmother gave you for your birthday? The bonus money from work? When you put those funds in your bank account, they are called deposits. All deposits must be recorded and added to the balance. As with the previous steps, after you record all of the deposits in your checkbook register, compare these against the bank statement. Withdrawals, which occur any time you take money out of your account, also have to be recorded. You might use an ATM, go into the bank and get money, or use your debit card at the store. These are examples of withdrawals. Withdrawals are deducted from your balance when you record them. When you are balancing your account, compare withdrawals and deposits with the withdrawals and deposits on your bank statement.

Look at last month

Though the art of check writing has almost vanished, some companies still prefer being paid with checks over cash, credit cards, PayPal or Venmo. Did you know that when you pay for something with a check, the money won’t always immediately or even quickly be deducted from your account? This is why you might need to look at the statement from the previous month to confirm if anything is outstanding, compare the statement to your check register, and mark off these transactions once they have cleared.

Confirm your current balance

Once you have reviewed all the transactions where money went into or out of your bank account, you must look at the total ending balance. Remember – if you have a transaction that still needs to clear from your bank, you need to subtract this amount from your ending balance.

But what happens if you do all the steps above and can’t get your register to reconcile with the bank’s records? What if you record all deposits, debits, checks, and fees, and you see that the amount you think should be in your account does not match what the bank statement says you have?

First, take a big breath. You might even want to step away for a minute or two and take a break, because taking a break can help you review your account with fresh eyes. 

When you’re ready to work on balancing again, start by figuring out how much the difference is. If your checkbook balance is higher than the bank statement, subtract the amount on the bank statement from the amount on your register. Or if your check register shows a lower amount, deduct it from the bank statement amount. This will show you the difference between the two.

Hopefully, you will find that you forgot to check off something that cleared or accidentally marked something as completed when it wasn’t. It could also be something like recording one digit wrong, which can cause your balance to be off. You have to go through all the transactions until you find the mistake.

I Have Trouble Balancing My Checkbook

If you can’t find the mistake and are thinking, “I have trouble balancing my checkbook,” remember that your bank is there to help you. You can often go to the bank, call them, or even get help from your bank online. Your bank does not want you to get charged for having insufficient funds, especially if that is because you have the wrong information in your checkbook. This is one reason they should be happy to help you figure out why you are showing a different amount than they are. 

Is Balancing a Checkbook Necessary?

You might still question – is balancing a checkbook necessary? As you can see from the steps above, it helps to know how much is in your bank account. If you are trying to stick to a budget or just want to ensure you have enough money available to pay your bills, knowing how much money you have is the only surefire way to accomplish either of these things.

Balance Your Checkbook Today

What are you waiting for? There are many reasons you should balance your checkbook today. By taking the time to accurately calculate how much money you have in your account today, you will have a better idea of how much you can spend tomorrow. You don’t want to overspend and get yourself into a cycle of overdraft fees from your bank, do you?

Finding Balance With MaxLend

Now that you have balanced your checkbook, you might find that you are coming up short on cash this month. At MaxLend, we understand there are many reasons why you don’t always have enough money to pay for things you want or need.

Maybe you had unexpected expenses. Perhaps you just thought you had more money than you actually did. Whatever the reason, if you need help, you can apply for a personal loan with MaxLend.

MaxLend is a reputable online direct lender. We offer cash loans which are given as installment loans online. These loans are great alternative solutions to payday loans. So why not apply for cash online today?

Do you have more questions? Just visit our website or call MaxLend at 877-936-4336. You can learn more about how our loans work or find answers to many frequently asked questions.

If you apply for a loan and qualify, you could receive Same Day Funding.* Do we offer any perks for taking out a loan with us? Of course! After your first loan is funded, you will be enrolled in our MaxLend Preferred Rewards program.


*Same Day Funding is available on business days where pre-approval, eSignature of the loan agreement and completion of the confirmation call, if a call is required, have occurred by 11:45 a.m. Eastern Time and a customer elects ACH as payment method. Customers who complete this process by 1:30 p.m. Eastern on business days may still receive funds on the same day, but some banks may not disburse the funds until the next business day. Other restrictions may apply. Certain financial institutions do not support same day funded transactions. When Same Day Funding is not available, funding will occur the next business day.

The content on this site is for informational purposes only and is not professional financial advice. MaxLend does not assume responsibility for information given. All information should be weighed against your own abilities and circumstances and applied accordingly. It is up to readers to determine if this information is safe and suitable for their own situations.

MaxLend, is a sovereign enterprise, an economic development arm and instrumentality of, and wholly-owned and controlled by, the Mandan, Hidatsa, and Arikara Nation, a federally-recognized sovereign American Indian Tribe. (the “Tribe”). This means that MaxLend’s loan products are provided by a sovereign government and the proceeds of our business fund governmental services for Tribe citizens. This also means that MaxLend is not subject to suit or service of process. Rather, MaxLend is regulated by the Tribe. If you do business with MaxLend, your potential forums for dispute resolution will be limited to those available under Tribal law and your loan agreement. As more specifically set forth in MaxLend’s contracts, these forums include an informal but affordable and efficient Tribal dispute resolution, or individual arbitration before a neutral arbitrator. Otherwise, MaxLend is not subject to suit or service of process. Nothing in this website is intended to waive or otherwise prejudice MaxLend’s entitlement to these protections. Neither MaxLend nor the Tribe has waived its sovereign immunity in connection with any claims relative to use of this website. If you are not comfortable doing business with sovereign instrumentality that cannot be sued in court, you should discontinue use of this website.