The Checkbook Balancing Act by Mary Hunt on Creators.com

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The Checkbook Balancing Act

Dear Mary: I have an embarrassing question for you. I will be 70 years old soon, and I never have been told how to balance a checkbook. People just assume I know. Is it too late to learn? — Bobbie Y., e-mail

Dear Bobbie: You're not the only reader who's been embarrassed to ask a question about money and finance. I filled a book with these questions and my answers. Keep an eye on your mailbox. I am sending you an autographed copy of "Can I Pay My Credit Card Bill With a Credit Card? And Other Financial Questions We're Too Embarrassed to Ask!" I think you'll have fun reading it, and you'll learn a lot in the process.

You should balance your checkbook monthly to catch the bank's mistakes. There are great software programs and online tools that can do this for you. Some of them are free. Check out Mint.com and http://quicken.intuit.com. Here are the basic instructions to reconcile your checkbook against the bank's statement:

Step One: Determine whether you have outstanding checks that haven't cleared your bank. Using your statement, check off your cleared checks in your checkbook register. Make sure that the amount of each cleared check is the amount you recorded.

Step Two: Verify that each deposit recorded on your bank statement is recorded also in your check register, including your direct deposits. Make sure the statement shows all deposits you made. Check off your deposits just as you did for your checks.

Step Three: For ATM withdrawals or debit card purchases, check off each transaction on the bank statement against your check register.

If your statement has items that have cleared that aren't in your checkbook register, record them now.

Step Four: Check your bank statement for bank fees, such as monthly fees and those for (gasp!) bounced checks, and record them in your register. Record any interest earned in your register, too.

Step Five: Go through your checkbook register or duplicate checks and list checks that have not cleared the bank. These will not be listed on your statement. Make note, also, of outstanding debit card purchases or ATM withdrawals that have not cleared the bank. Total all of these items.

Step Six: List any outstanding deposits that were not included on your bank statement. Total these deposits.

Step Seven: Using a piece of paper, your checkbook register, or the form on your bank statement, list the ending balance shown on your bank statement. On another line, enter the total outstanding deposits. On a third line, enter the total amount of your outstanding checks.

Step Eight: Using a calculator, enter the ending balance on your statement. Add the total amount of your outstanding deposits. Finally, subtract the amount of your outstanding checks. This should equal the balance shown on your checkbook register (or, if you never have reconciled your checkbook, this will be your new balance from which to start).

Do you have a question for Mary? E-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including "Can I Pay My Credit Card Bill With a Credit Card?" To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

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