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Is Balancing a Checkbook Necessary?

Is there any reason to keep track of my bank transactions in a checkbook? I used to use a checkbook but after it ran out I’ve just been looking at my bank account online and checking it against my receipts. Is this ok?

Believe it or not, you are doing a lot better than most people! Don’t worry, there are many ways to keep your checkbook balanced; you don’t necessarily have to do it in your physical checkbook register. And, unless you are immediately writing every transaction in your check registry, you may forget something, especially if you are using a debit card rather than a check, so keeping your receipts is always a good idea. 

As long as you are reconciling your account at least once a month it doesn’t really matter how you do it. There are many online applications and programs that can help you balance your checkbook: Clear Checkbook, Mint.com, Quicken and many others. Programs such as these can make keeping track of your account much easier. Many of these programs now have online or smart phone applications, which will allow you to enter each transaction as you make it. 

A well balanced bank account will let you know how much money you have in your account at all times. It’s also a good way to keep track of what you are spending your money on, this way, if you need to cut back on anything you can easily see where you may be spending too much. Additionally, it is the best method to make sure that you do not overdraw your account. It’s a good idea to set a minimum and not go below it. If possible you can also attach your savings account to your checking account so if you do overspend the money can be pulled from your savings account. You don’t want to bounce a check, as there are fees for each returned check, in addition to overdraft fees. These fees can quickly add up, making a bad situation worse. 

Finally, you will be able to see if there are any mistakes or if there are any transactions that do not belong to you. Banks handle thousands of transactions every day and they occasionally do make mistakes. You will want to make sure that your records match the banks records exactly. If there is a mistake it is much better to notice it right away then have to wade through months worth of back statements searching for the error.

Cara Newman is the former Editor of Young Money magazine, YoungMoney.com, YoungMoneyTalks.com, and FindaCollegeScholarship.com. She has published six books and dozens of articles. Her writing has been featured in The San Francisco Bay Guardian, Salon.com, the McClathy-Tribune, and more. Cara's background in journalism lets her easily communicate with any age group; she is a trusted source of information when it comes to financial matters concerning teenagers and young adults. In 1995, she graduated from Syracuse University with a B.S. in Mass Communications. Since 2000, she has worked as an editor and a writer, publishing dozens of stories and articles, as well as six other books. Her writing has been featured in The San Francisco Bay Guardian, Salon.com, the McClathy-Tribune, and more. Cara has been featured on over two dozen radio programs, "Good Morning Atlanta" and San Francisco's KGO 6 o'clock news. As the Editor of Young Money, Cara often speaks at financial empowerment conferences for young adults. Cara worked hand-in-hand with PBS on their program, "Your Life, Your Money," creating content to accompany their program. YOUNG MONEY® was launched in 1999 to change the way young adults earn, manage, invest and spend money. As a leading national money, business and lifestyle magazine written primarily by student journalists, YOUNG MONEY specifically focuses on personal finance, money management, entrepreneurship, careers, and investing. YoungMoney.com is the leading young adult personal finance website and an original member of JumpStart Coalition for Personal Financial Literacy.
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