12/01/2010

The“Balancing” Act: Keeping Track of Your Spending


Balancing your checkbook is one of the most basic skills for good money management. And yet millions of people don’t do it. Balancing your checkbook is a good way to cover the W's when figuring out your expenses: The Who, what, when, where, and how.
Balancing your checkbook is important for:
  • verifying that your records match the numbers on your bank statement
  •  correcting mistakes before the end of the 60 day correction period
  •  avoiding bouncing checks.
Remember that balancing your checkbook also applies to ATM transactions. Make sure that you are also tracking when you are taking out cash or using your debit card on purchases. Also, pending items for cash or debit may not always show up on a banking statement and may still need to be processed. Remember to track them! The fees for a bounced check or overdraft can be $25 dollars or more.
Here's how to ballance your checkbook:
Track your progress. By enrolling as a Virginia Saver, you can utilize the Virginia Saves Savings Tracker for free to record deposits and monitor your progress.

For more free budgeting tracking softwear, click here for a Minty way to get started. Mint has worksheets, tips, and tricks and signing up is free.
  • Keep a check register and write down all transactions not just checks. Make sure to include deposits, ATM withdrawals, and debit card purchases.
  • Remember that there may be checks or electronic debits that may not have cleared with the bank, so recording every purchase is important.
  • Make sure to check your balance often. Read your statement carefully to determine any transactions that you might have missed such as ATM charges.
  •  Record everything, as well as bills paid online. If your service gives you a confirmation code, write that down next to the payee information. Remember to regularly recalculate your balance in your account and correct your mistakes.
  • Record where you have spent your money. If you spend it at the grocery store-- write it down, if you spend it at the mall-- write it down.
  • Check your math and look for missing transactions, and bring errors to the attention of your bank. Be wary of misplaced decimals while calulating
  • Last, remember to finish balancing.

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