I find it hilariously surprising how many websites and blog posts there are instructing people how to balance their checkbooks. This is not because balancing your checkbook is something that is made completely unnecessary by the new functions and capabilities of modern banking. Rather, most guides of balancing your checkbook are more tedious than they need to be; many guides completely ignore the fact that you can check your bank account anytime from anywhere.
The Old Version of Balancing Your Checkbook
The old version of balancing your checkbook hinged on the fact that you only received your bank statement once a month. So, if it’s been 20 days since you last received your statement, your account is probably completely different than what your last statement shows. This is why you would record all your deposits, withdraws, and transactions in your checkbook, adjusting your bank balance with each transaction (or day of transactions or week of transactions depending on your transaction volume). This method is outdated because it makes two outdated assumptions:
- You only get to see your bank account every statement (so every month).
- You use your checkbook enough to carry it around with you.
Why Balancing Your Checkbook is Still Important
Because you can see your bank balance anytime, you might assume that the tedious process of balancing your checkbook is completely unnecessary. While I don’t think it needs to be done how it was in the traditional sense (by writing each date and transaction down in your checkbook and adjusting your bank balance accordingly), there are still some very important reasons to track your purchases and bank activity:
- To make sure you weren’t mis-charged in any transaction.
- To make sure there aren’t any transactions you didn’t make (indicating identity theft).
- To account for transactions (and especially checks) that have not been processed into your online balance.
The New Checkbook
I rarely ever write checks anymore. And when I ever do have to write checks, it’s usually at home because I will immediately put them in an envelope and then in a mailbox. So my checkbook is always at home. It would actually be unnecessarily risky to take my checkbook with me in the off chance that I lose it. Therefore, recording my finances on a checkbook makes no sense.
Instead, I record my finances on my phone. How you do this just depends on your preference and the capabilities of your phone. I have a smartphone with the Evernote app, so I just snap pictures of all my receipts, ATM transactions, and checks written and save them on my Evernote. I can than access them from my phone or computer at any time. You could just record the receipt totals and the date in a notepad-like app, or just record them on a physical notepad if you don’t have a smartphone. Another option is to keep your receipts in your wallet, and bring them home to record them on whatever medium you prefer.
Balancing Your “Checkbook”
Every couple of days when I’m at a computer (I could do this on my phone, but it’s a much easier process on a computer), I check my bank account online and make sure that all of my recent transactions are accurate and processed into my bank account. If they are all processed, then the balance on my bank account is accurate and thus my “checkbook” is balanced. If I see transactions that I have not recorded, I check any outstanding checks that I wrote that may have just been cashed. If the transaction is still unaccounted for, I contact my bank to get more information about the transaction and most likely dispute it.
For checks that I’ve written that haven’t been processed yet, I have to subtract that amount from my online balance to get an accurate reflection of my bank account. I wish there was a feature that could allow you to adjust your online balance for a pending check that you wrote, but instead you just have to do the math when you see your online balance until the check is processed. Since I don’t write many checks, this is not a hassle. But if you do write a lot of checks, I suggest adjusting your bank balance and recording your new balance on your phone or on a piece of paper in your wallet.