How Do You Balance Your Checkbook?

Growing up, I watched my parents maintain their checkbook ledger quite carefully, though it was easy for them: they only wrote checks or (on a rare occasion) made a counter withdrawal from their checking account, and they also would manually go to the bank and make deposits of any paychecks they received.

Today, I still write and receive checks, but I also do some ATM withdrawals, some check card purchases, and some automatic withdrawals as well. These new transaction types have made money management easier in some ways (it’s much easier to get at my money when I need it and in some ways it’s easier to budget) and harder in others (the old paper ledger doesn’t cut it).

Rather than sticking with a paper ledger, which would make it very difficult to keep track of all of these different transaction types, I’ve moved the whole thing to Microsoft Excel. Essentially, it works like a traditional ledger, with a check number column, a memo column, a credit column, a debit column, a “type of transaction” column, and a continuous balance column (just a formula that automatically adds the new debit and subtracts the new credit from the balance of the previous row).

Whenever I pay bills, I just enter them right into Excel. Whenever I’m out and about and I make purchases, I save the receipts and enter them in Excel when I get home. Whenever I make an electronic payment, I immediatly make an entry into Excel. In short, a spreadsheet has become my replacement for a checkbook ledger.

At first, I had trouble with automatic deductions and deposits. They would come at various points in the month and if I forgot to enter one on the right day, my balances would get out of whack. I finally hit upon a solution that I call the “better safe than sorry” solution: at the start of each month, I enter all my automatic withdrawals for the month, and at the end of the month, I enter all of my automatic deposits for the month. Using this method (along with making sure my balance in Excel stays above zero), I am able to be sure that I won’t overdraft in a given month.

I’ve found that this system works great for me. What system works well for you?

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  1. Clink says:

    I’ve been having the same trouble as you. I do most of my banking electronically and I almost always flub up, to the point of bank fees.

    I like your idea of entering the withdrawals at the beginning of the month.

  2. MoneyFwd says:

    I do it all somewhat differently. I basically go to zero-based budget route. I have my budget on a spreadsheet and as the month goes on I add my paycheck and subtract the money I use. At the end, any money that is left (which is usually none at the moment) goes into savings. I use my credit card for almost all of my expenses and purchases so I basically never have to worry about needing a buffer in my checking account. And then I pay off my credit card once a month. This may need to change in the future, but for now it works for us.

  3. Matt says:

    I keep a detailed expense spreadsheet where I track all money going in and coming out. I find that this works better for me because I can see what I spend my money on. If I use an ATM to get some cash I find that if I don’t track the actual expenditure the money vanishes.

    As for checks… I use them to write myself checks from one bank to the next and other than that they are simply there for VOID checks. One little book of checks lasts me literally years.

  4. a0z0ra says:

    I used GnuCash software (on my Ubuntu) to keep track of my finance. It’s opensource, and I heard that it has most of the functionality that you can find in Microsoft Money & Quicken. I highly recommend it.

  5. For awhile I was using some custom finance software that I had written, before I realized that it was just too much for what I needed. I sat down one night and wrote up a quick Excel Spreadsheet (much as you described) and have added onto it ever since.

    I have everything broken down by month and maintain a transaction date, description, recipient, category, cleared status and value.

    I keep two running totals, one is what the bank thinks I have and one is what I really have (this is achieved by using the cleared column). I check the bank every few days for any missed transactions and ensure that I’m always on balance.

    Here’s where I get fancy. I maintain a pivot table alongside each month’s “ledger” that breaks out values spent based on category. Then, alongside that I maintain my “budget” and can instantly see where I went wrong! For instance, this month the sum of budgeted automotive and real automotive ends up being negative, meaning that I went over my budget (my wife’s fuel pump seal died).

    I also do some futzing with certain goals, incremental payments (saving for tuition, emergency and that sort) and then give a total of remaining funds letting me know how much I’ve got extra this month for fun!

  6. Berry says:

    I use… it is brand new but so far I like it. I know exactly where my cash goes.
    It’s free and you can access it from anywhere.

    (disclosure- I did help develop it but this post was a perfect place to share it.)

  7. If your account has no overdraft (as mine does), is there any tangible benefit to doing this?

    The only reason I can see is that you’ll notice suspicious transactions, which is a very real benefit. However when weighed against the time and effort it would take for me to keep track of this in a schedule that I already feel is too cramped, I don’t do it.


  8. I pay everything on my credit card. i pay that once a month. everything else is fixed like rent, cellphone bill, etc except utility bill.
    whats there to balance?

  9. Nguyen says:

    I use AceMoney to keep track of all my various accounts with banks, brokerages, TreasuryDirect, eBay, etc. I much prefer it to Quicken, Quickbooks, or Money. At $30 for the full version and life-time updates, I thought it was pretty reasonable. I’m not always diligent at manually keeping up with record-keeping, so about once a month, I export my records for various accounts as .QIF files and import them into AceMoney. Usu. takes another 15 minutes to 1/2 to make sure everything is reconciled correctly. I also update the prices of stocks I’ve entered into my to-watch list every once in a while. The reporting/graphing feature is very nice and easy to use.

  10. Bettsi says:

    And here I thought I was so clever! I developed our Excel spreadsheet in January and so far it has been great. However, we are notorious “nickel and dimers”, so it is A LOT of data entry and checking the bank’s website. I think the key is probably a cash allowance for the small stuff, but it seems to go faster that way!

  11. Caroline says:

    I do not balance my checkbook I don’t even have a checkbook, I use my credit card for everything utilities,food, car insurance etc. and pay it in full each month. Therefore I rarely need cash or make atm withdrawls. My credit card gives me 1% cash back,(they actually send a check each month with the bill) so I actually earn about $35 per month. We previously struggled with overdrafts with two people using the same account so this works better. I also use paytrust bill pay service to pay everything else, it keeps track of my outstanding checks and I can schedule quarterly or yearly payments such as hoa dues or property tax so that I will not forget. At tax time I can just run reports and all of my expenses are categorized. Paytrust charges a fee but aside from my credit card charges I have to pay about 40 other business related bills.For me paytrust pays for itself in that just buying stamps and checks and the time to write them would cost more.And I would be drowning in paper because your bills actually get mailed to paytrust and they scan them.

  12. Patty says:

    If anyone out there can help me I will greatly appreciate it. My old computer broke and I had my Excel spreadsheet on it. My old co-worker sent me a spreadsheet with a formula to add and subtract automatically, but I didn’t save it on a disk. I wouldn’t bother anyone but I guess she changed her email address. I’m trying to set it up again. I’m having so many problems with it I’m going crazy.

    I want 6 columns.

    1)check # 2)Date 3)Transaction Description 4)Withdrawl 5)Deposit 6)Balance or Total

    It automatically adds and subtracts the Total.

    Thank you for your time


  13. Mike says:

    I use Quicken 2005 for Mac…It works, it can schedule automatic payments and either a)enter it automatically, or b) prompt you to enter them (allowing you to change variable amounts, ie you electric bill, but without having to setup the whole transaction manually). You can have multiple accounts (checking, savings, credit cards, home loan, auto loan, home asset (to offset the loan), etc) and can show net worth, budget, catagories (for income and expenses), graphs, monthly or year to date data, invesment accounts, ect. Yeah, I could do it all with Excel (or open office, or google docs), but it would take a while to set it all up and Quicken was free with my Mac when I got it (the Mac Mini) and setting up a new account in it is simple, all the tracking and graphing is set up. I may upgrade to a newer version at some point, but likely not til I get a new computer.

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