| | 
Balancing Made Simple
This brochure will help simplify the balancing process and hopefully reduce the anxiety level when your bank statement arrives.
Seldom will your bank statement and checkbook register agree. But, that is no reason to panic. It's merely a matter of timing.
Your statement lists the transactions posted to or cleared to your account as of the closing date. The closing date is usually found in the upper right-hand corner of the first page of your statement.
Once your statement has closed, it will take a few days for the information to be printed and for it to arrive in the mail. Meanwhile, you are continuing to write checks, make ATM withdrawals and/or deposits, and hopefully, keeping track of these transactions in your checkbook register.
Remember, it also takes a few days for your checks, ATM, Visa Check Card, and/or deposit transactions to be recorded on your account.
Recording each transaction in your checkbook register and adding or subtracting it from the balance is the first step to simplifying the balancing act.
It's important to record the transaction at the time you actually write the check, make a withdrawal, or make a deposit.
By recording the transactions and balancing your account total in your checkbook register, you'll get a clearer picture of your spending habits and know exactly how much money you have. And, if for some reason you detect a problem, the sooner you can correct it, the better.
Balancing your checkbook each month within a day or two of receiving your statement will not only reduce your stress level, it will lessen the amount of time it takes to complete the task.
On the back of your monthly statement is a handy form to help you balance. Use it along with the following steps to make balancing a snap.
Before you begin, gather the following:
In your checkbook register, enter all of the interest earned on your account (if applicable). The interest earned will appear on the front of your statement.
Add this balance. Be sure to record any other credit amounts listed, such as bank corrections.
In your checkbook register, record any charges that have been subtracted from your account, as shown on your statement. These charges may include:
Subtract these charges from your register balance.
| Last Checkbook balance | |
| Interest from Statement + | |
| Subtotal | |
| Service Charges from Statement - | |
| "New" Checkbook Balance |
Look at your latest statement and verify that all deposits listed match the deposit amounts listed in your checkbook register.
Make a list of any deposits that are listed in your register but do not appear on your statement. Add these together. Tip: Use the worksheet on the back of your statement.
| Date | Outstanding Deposits | Amount |
| Total | ||
Match the entries in your register with the transactions listed on your bank statement. Compare check numbers, dates, and dollar amounts on all checks written. If these items match, place a check mark next to the transaction in both your register and on the bank statement.
If they, don't match, circle the item in both places so that you can come back to fix the error once all of the transactions have been checked off.
If Transactions Don't Match
Check for one of three errors:
To Correct the Errors
Note: If you do not have cancelled checks or images returned with your statement, contact your branch and have them send a copy of the item in question.
Be sure that all of the outstanding items from your previous statements have been included in this statement. Otherwise, they are still outstanding.
Note: If an item is outstanding for 60 days or more, contact the person or company you wrote the check to and see if the check has been received. If it hasn't, the check may have been lost and you may want to call the bank and make a stop payment.
Verify that additional withdrawals listed on your statement, other than checks, are charged for the amount actually drawn. This includes ATM withdrawals, Visa Check Card transactions and any automatic debit transactions like insurance payments, loan and/or utility payments.
Make a list of all outstanding checks or ATM/Visa Check card withdrawals. These are transactions that appear in your checkbook register that do not have a check "P" mark next to them. Add these items together. Tip: Use the worksheet on the back of your statement.
Now, balance your checkbook register to your bank statement. Use the formula below, which is also located on the worksheet on the back of your statement.
| Statement Ending Balance | |
| ADD (+) Deposits Shown in Checkbook Register But Not on Statement | |
| Subtotal | |
| MINUS (-) Total Outstanding Checks | |
| Total | $ |
Compare this total with the ending balance in your checkbook register. They should be the same. If not, there's a mistake. Do Not Panic! This can be easily fixed. If they are the same Congratulations! You've successfully balanced your checkbook.
Well, you've tried hard and made every effort. Now it's time to ask for help. Call or come by one of our branches. You will need to bring in your current bank statement and your checkbook register. Every effort will be made to assist you balancing, and next time it will be easier.
The following tips are designed to help you manage your money more effectively.
1. Calculate your Net Income. Know all your sources of income after deductions, like income taxes and 401k, are removed. This number ultimately determines what you can spend each month.
2. Create a Personal Budget. A budget is your roadmap for spending and is a tool to help you achieve your financial goals. Save your receipts and take the time to add up all of your expenses for a month. Subtract your expenses from your Net Income, calculated in Step 1. If the result is a positive number, then you are living within the limits of your income. If the result is a negative number, your expenses are exceeding your income. Look for non-essential expenses that you can reduce and recalculate. Ask yourself if each expense is a "want" or a "need," and try to minimize spending on the "wants." Most importantly, once you create a budget, stick with it. Make adjustments, as necessary. Having a budget will allow you to control your money rather than your money controlling you. Ask your banker for a copy of the Personal Budget Planner, which will help you create a budget.
3. Balance your Checkbook. The balance in your checkbook is a critical number in money management because it allows you to know exactly how much money currently you have to save or spend. Keeping an accurate checkbook register also allows you to review where you spend your money. Be sure to record all transactions, including ATM/Visa Check Card transactions, checks, and deposits. For more information on balancing your checkbook, request the brochure "Eight Simple Steps for Balancing Your Checkbook" from your banker.
4. Minimize your Use of Credit Cards. Millions of Americans are in debt. Credit card debt is an easy trap to fall into. The best way to avoid this trap is to avoid using credit cards altogether. If you like the convenience of a credit card, consider getting a check card instead. Check cards are accepted at most places that accept credit cards. The difference is that the expense is automatically deducted from your checking account balance, which reduces your urge to spend more than you have. Be sure to track each check card transaction in your checkbook ledger, just like you would if you wrote a check.
5. Pay Down Your Debt. If you have Credit Card debt or other debts, pay the maximum to your highest interest rate debts first and the minimum on lower interest debts to pay debts faster.
6. Establish Savings. Pay yourself, first. When you pay your monthly bills, write a check to yourself and put it in your savings accounts. If you get your paycheck deposited automatically, ask your employer about having a portion of your paycheck deposited to your savings account.
7. Know Your Credit History. Credit reporting agencies collect data regarding your credit repayment history and sell this information to lending agencies.
If your report shows that you are late paying bills, have maximized lines of credit, or have bankruptcies or other collection activities, this will negatively impact your ability to get credit.
You can request your credit report from the following credit reporting agencies:
Equifax www.equifax.com
Trans Union www.transunion.com
Experian www.experian.com
If you have been denied credit, you can get a copy of your credit report free. Otherwise, a small fee may be required.
If you find incorrect information in your credit report, contact the credit reporting agency. They are required to investigate the information within 30 days and delete the information if it cannot be verified. Your rights are further described in the Fair Credit Reporting Act.
The following recommendations are designed to help you establish and or grow your personal savings.
The following tips are designed to help you reduce your debt quickly and economically.
For more information on effective money management and financial fitness, consider the books and web sites listed below.
Pay It Down by Jean Sherman Chatzky. November 2004, Penguin Books, Inc., ISBN:1591840635
The Money Book for the Young, Fabulous & Broke (Hardcover) by Suze Orman, March 2005, Putnam Publishing Group; ISBN: 1-57322-2976
The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas J. Stanley, Ph.D. and William D. Danko, November 28, 2000, Pocket Books; ISBN: 0743420373
How to Get Out of Debt, Stay Out of Debt and Live Prosperously. By Jerrold Mundis, April 1990, Bantam Books; ISBN: 0553283960
Credit Card Debt: Reduce Your Financial Burden in Three Easy Steps by Alexander Daskaloff (April 1999) Avon; ISBN: 0380807009
Slash Your Debt - Save Money and Secure Your Future by Gerri Detweiler, Marc Eisenson, and Nancy Castleman, October 1999 Financial Literacy Center; ISBN: 0965963837
9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying by Suze Orman, 1st edition (December 15, 2000) Three Rivers Press; ISBN: 0609801864
http://www.mapping-your-future.org/features/dmtensteps.htm
Provides 10 Steps to Financial Fitness and tips for creating budgets, and establishing savings. Features a Savings Calculator and test to help you gauge your current financial situation.
http://www.quicken.com/planning/debt/
This site offers a free interactive Debt Reduction Planner, which allows you to save money on interest expenses and pay your debt off sooner by paying off your higher interest debts first.
http://www.nfcc.org/
This is the home site for the National Foundation for Credit Counseling, a national non-profit network of 1,450 Member agencies designed to provide assistance to people dealing with stressful financial situations. The site provides links and information for financial counseling, debt planner tools, and other helpful websites.
http://www.pueblo.gsa.gov/cic_text/money/save-fit/save-fit15.htm
This government sponsored website for The Department of Labor provides additional helpful links for retirement planning and financial fitness, including free online calculators.
