Tara Crooks
Limitless Contributor

Let's be honest, do you know the current balance of your checking account? I know many people who never balance their checkbook. Some prefer to leave a "buffer" amount in checking to cover any mistakes that may occur. Some don't even bother to make an attempt to keep track of transactions. I've tried to understand why or how they can do this. Honestly, I cannot wrap my head around it.


My bottom line is that I have to know my bottom line. Most would think it's because I'm a saver but I think it's quite the opposite - I'm a shopper. If I don't balance my account howwill I know if I can afford that extra trip to Target?


Admittedly, debit cards have only further complicated the issue. How many times have you been out to lunch and seen someone pay with a debit card and not take the receipt? I want to think that means that they are so intelligent they're already calculating a running total in their head but more than likely the transaction is never getting logged.


The most important thing when it comes to becoming financially stable - balanced - is if you are not spending more than you earn. Managing your bank accounts, whether savings or checking, by reconciling them to your bank's records is a responsibility - and one of the best money management habits you can keep.


You don't have to use a traditional bank register. You just need a place or a system in place for recording your running (actual) balance. Moment of truth: I keep a long post-it note in my wallet stuck to my book of checks and balance it every military payday. I say actual, because many of you are banking - no pun intended - on your bank to keep track of spending for you. Even if you have online banking access, you should keep your own records of account activity because what you see on your "available" might not actually be what is available.


Here's an easy way to break it down:


Keep track of all additions to the accounts - direct deposit of wages, check deposit, interest earned, etc.

Keep track of withdrawals from the accounts - purchases on a debit card (note cash back, if applicable), automatic bill payment, ATM withdrawals, transfers, etc.


Here are the steps to get a grip on your balance:


  1. Write down the balance on your last statement. (or the current balance on your online account)
  2. Add any deposits that have been made (or processed) since the date of that balance/statement.
  3. Subtract any withdrawals that have been made (or processed) since the date of that balance/statement.
  4. Keep a running total and at the end of the month make sure it matches.


Besides knowing where you stand - and how much you can spend on Target and a night out to dinner - you'll verify your bank records match the bank (banks can make mistakes!), you'll avoid overdrafts, and you'll sleep a little better knowing that your finances are in order.


For other great money management basics visit the USAA Education Foundation - Banking Basics.