How To Balance A Bank Statement

I do my balance electronically because my check register is in my Palm Pilot which is somewhat different than how I used to do it on paper. Here are the instructions that the bank puts on the back of statements to help people but when I did it on paper I did it this way:

Compare and mark check numbers and the amount in your Checkbook Register with the check numbers and amounts that the bank shows they have received on your Bank Statement. Marking your statement as well as your checkbook helps later on if you have a discrepancy.

Bank Statement Credits, Service Charges or Other Deductions

List and subtract in your Checkbook Register any previously unrecorded service charges or other deductions, such as ATM fees, purchase of new check etc., that are listed on your bank statement. Also, list and add any credits not previously recorded such as interest or fees that the bank has waved. Don't forget to mark these like you did the checks, in both places, so that they show that you reconcile with the bank. This total now is your "true checkbook register balance" for the closing date that month. Since it includes what you have outstanding it will not match the bank statement balance.

I used to leave several empty lines in my check register near the date that my statement would close to have room to balance. Because I always kept my register in pencil, this allowed me to start fresh adjusting my totals for the next entries when I needed to make adjustments in balancing. It kept my register neat.

In this space I would list my outstanding checks, deductions (such as ATM fees) and all deposits that were not on my bank statement. It allowed me to carry them forward into the next month and not have to search for them when they did show up on a future bank statement. When you total what you have outstanding and subtract it from your "true register balance" it should equal the same balance as on the bank statement.

If you had no adjustments in balancing your statement your figures should carry on just as they were before you balanced. If you did make changes then you recalculate your totals starting with your reconciled balance and subtracting or adding your outstanding entries first.

I hope you can find a way to balance your checkbook each month that works for you. You will want to read my article "How To Keep Your Bank Account Full And Overflowing"