I went to college, you'd think I could balance my checkbook properly.
November 6, 2010 3:12 PM Subscribe
Why do I keep having checkbook balancing issues? I'll think I'm fully balanced and up to date, but when I check my online banking, I'm off by a number that I've already deducted from my account. So in my records, I have to deduct it twice to get to my present balance.
I like keeping accurate tabs of my checking account activity. I'm pretty good about inputting everything into my checkbook, usually when it happens--i.e. when I write a check, schedule a bill, take out cash from the ATM, you get the drift. Because I deduct bills from my checkbook at the time I schedule them, my checkbook order is different from my bank's account of my checking activity. I then go and compare the two when I balance my checkbook to ensure I've kept accurate records.
The last two times that I've balanced my checkbook, however, I've been off by exactly the amount of a bill I've already deducted from my account (and yes, the bill shows up on online banking as having been deducted already--that's not the problem!). It's been one that I deducted way in advance of the payment actually processing. For instance, I deducted the $258 for my monthly insurance bill 12 days before the money came out of my account. I go to balance my checkbook today, and my records--even though I've accounted for the $258 bill--are over my bank's balance by exactly $258. So in my checkbook, it's like I took out $258 twice to get to what my balance is according to my bank.
This is the second time this has happened. Does this even make sense? I wonder if my balancing is just incorrect to start with--although it's eerie that this has happened twice now with the exact numbers of bills I've paid ($258 and $165). Is there something fishy about my deducting them from my present balance when they'll actually be taken from my account almost two weeks later, when the balance has changed? To note, I have about 15-20 checking account transactions a month.
On another note, do you MeFites have a better system for keeping track of your checkbook that is maybe a bit more foolproof? I've considered Mint.com, Money, etc.
Thanks a million.
I like keeping accurate tabs of my checking account activity. I'm pretty good about inputting everything into my checkbook, usually when it happens--i.e. when I write a check, schedule a bill, take out cash from the ATM, you get the drift. Because I deduct bills from my checkbook at the time I schedule them, my checkbook order is different from my bank's account of my checking activity. I then go and compare the two when I balance my checkbook to ensure I've kept accurate records.
The last two times that I've balanced my checkbook, however, I've been off by exactly the amount of a bill I've already deducted from my account (and yes, the bill shows up on online banking as having been deducted already--that's not the problem!). It's been one that I deducted way in advance of the payment actually processing. For instance, I deducted the $258 for my monthly insurance bill 12 days before the money came out of my account. I go to balance my checkbook today, and my records--even though I've accounted for the $258 bill--are over my bank's balance by exactly $258. So in my checkbook, it's like I took out $258 twice to get to what my balance is according to my bank.
This is the second time this has happened. Does this even make sense? I wonder if my balancing is just incorrect to start with--although it's eerie that this has happened twice now with the exact numbers of bills I've paid ($258 and $165). Is there something fishy about my deducting them from my present balance when they'll actually be taken from my account almost two weeks later, when the balance has changed? To note, I have about 15-20 checking account transactions a month.
On another note, do you MeFites have a better system for keeping track of your checkbook that is maybe a bit more foolproof? I've considered Mint.com, Money, etc.
Thanks a million.
Because I deduct bills from my checkbook at the time I schedule them, my checkbook order is different from my bank's account of my checking activity.
Totally normal.
Does this even make sense?
Not really. I mean, I think I follow what you're saying, but this shouldn't be happening.
Is there something fishy about my deducting them from my present balance when they'll actually be taken from my account almost two weeks later, when the balance has changed?
Not at all.
I'm not sure how these errors are occurring, but if you're entering transactions twice just to make things look the way you expect them to, you're only digging yourself in deeper. Don't do something you know is wrong just to cover up something else you suspect might be wrong; go back and figure out where you went wrong in the first place.
posted by jon1270 at 3:36 PM on November 6, 2010
Totally normal.
Does this even make sense?
Not really. I mean, I think I follow what you're saying, but this shouldn't be happening.
Is there something fishy about my deducting them from my present balance when they'll actually be taken from my account almost two weeks later, when the balance has changed?
Not at all.
I'm not sure how these errors are occurring, but if you're entering transactions twice just to make things look the way you expect them to, you're only digging yourself in deeper. Don't do something you know is wrong just to cover up something else you suspect might be wrong; go back and figure out where you went wrong in the first place.
posted by jon1270 at 3:36 PM on November 6, 2010
it might have something to do with the way the bank processes payments. i've noticed that when i check my balance online, a deposit may be included in the total but isn't included in the list of transactions. after a day or so it sorts itself out and everything shows up.
the most reliable way to balance your checkbook is to check them against your monthly statement rather than the online balance on a particular day - precisely because of the processing delays and future scheduled payments that you reference.
i swear by Quicken - i've used it for years and it works great. you can note any automated payments or future scheduled payments, and it will tell you your current balance (as well as reflecting future payments). it's a pretty complicated program but it makes keeping track of your finances so easy once you figure it out.
posted by lvanshima at 3:52 PM on November 6, 2010 [1 favorite]
the most reliable way to balance your checkbook is to check them against your monthly statement rather than the online balance on a particular day - precisely because of the processing delays and future scheduled payments that you reference.
i swear by Quicken - i've used it for years and it works great. you can note any automated payments or future scheduled payments, and it will tell you your current balance (as well as reflecting future payments). it's a pretty complicated program but it makes keeping track of your finances so easy once you figure it out.
posted by lvanshima at 3:52 PM on November 6, 2010 [1 favorite]
Is your checkbook accurate if you balance it against your monthly statement, instead of against online banking? It's going to be easier to find where the mystery deduction is on a fixed statement that SHOULD show beginning and ending balances, and all transactions, instead of against a running transaction summary like you get with online banking.
posted by endless_forms at 3:55 PM on November 6, 2010
posted by endless_forms at 3:55 PM on November 6, 2010
Are both of the bills that this happened with periodic bills for the same amount? Could a previous month's insurance bill, for example, have slipped into this month's accounting period along with this month's bill for the same amount? Reconciling against a monthly statement, like endless_forms suggests, is a good idea.
posted by hattifattener at 4:07 PM on November 6, 2010 [1 favorite]
i've noticed that when i check my balance online, a deposit may be included in the total but isn't included in the list of transactions.My bank shows both an "actual balance" and an "available balance" for my accounts. The "available balance" includes transactions that the bank knows about but which haven't gone through yet— scheduled payments, deposited checks, etc.
posted by hattifattener at 4:07 PM on November 6, 2010 [1 favorite]
Your question makes sense and I think the issue is that you're just not balancing it correctly. You should balance the checkbook with your monthly statement to be accurate.
#1 - Start with the "beginning balance" listed on the statement.
#2 - Compare the debits (checks, billpays, debit card transactions, ATM cash withdrawals, etc.). If there are debits in your checkbook NOT listed on the statement, write them down and add them together.
#3 - Complete step #2 again, but with the credits (deposits, interest, etc.). If there are credits in your checkbook NOT listed on the statement, write them down and add them together.
#4 - Take the beginning balance from the statement, ADD the total from #2 above and MINUS the total from #3 above. The amount you see will match the "ending balance" on the statement. Viola! You're balanced.
It's a good practice to mark off the items on your register in some way that are listed on the statement so it's easier to read next time, since it's possible that items may be outstanding over several statements (like Aunt Bee holding a check you sent her or something).
Use online banking to keep an eye on transactions going on in your account, but don't ever take the balance listed as the true and correct balance. It's common practice for people to rely on that and then the debit card transaction they forgot about from Target two weeks ago comes through and they're overdrawn.
Of course, all of the above assumes you keep complete track of your transactions with either a register or receipts, etc. For all of the steps above, the back of your statement should have directions and an easy layout to help with the process.
Cheers!
posted by cyniczny at 8:05 PM on November 6, 2010 [1 favorite]
#1 - Start with the "beginning balance" listed on the statement.
#2 - Compare the debits (checks, billpays, debit card transactions, ATM cash withdrawals, etc.). If there are debits in your checkbook NOT listed on the statement, write them down and add them together.
#3 - Complete step #2 again, but with the credits (deposits, interest, etc.). If there are credits in your checkbook NOT listed on the statement, write them down and add them together.
#4 - Take the beginning balance from the statement, ADD the total from #2 above and MINUS the total from #3 above. The amount you see will match the "ending balance" on the statement. Viola! You're balanced.
It's a good practice to mark off the items on your register in some way that are listed on the statement so it's easier to read next time, since it's possible that items may be outstanding over several statements (like Aunt Bee holding a check you sent her or something).
Use online banking to keep an eye on transactions going on in your account, but don't ever take the balance listed as the true and correct balance. It's common practice for people to rely on that and then the debit card transaction they forgot about from Target two weeks ago comes through and they're overdrawn.
Of course, all of the above assumes you keep complete track of your transactions with either a register or receipts, etc. For all of the steps above, the back of your statement should have directions and an easy layout to help with the process.
Cheers!
posted by cyniczny at 8:05 PM on November 6, 2010 [1 favorite]
I was a banker at a retail bank for a long time and I used to see people confuse the heck out of themselves by trying to reconcile their register balance to their online account balance. If you're going to use the register, you can't reconcile with what you see with online banking, just the statements. The statements lay it out is a way that makes it easy for you to do reconcile to your register.
My recommendation is to stop using your register. There are a couple of things that the register does for you:
1. Lets you track your balance
2. Lets you see how you are spending your money
3. Makes sure you catch any math errors by the bank (IE they added stuff incorrectly or that transactions are entered for the correct amount).
You are already tracking your balance online and that gets update pretty fast if you're using a check card for most transactions (and you should be at least a check card/debit card if not a credit card but the why of that is a whole other discussion). In the last four years I've written two checks.
There are many other, better ways for your to track your spending. You can look online, use excel or quicken etc.
The bank simply doesn't make math errors any more. They and merchants sometimes make entry errors like entering a $50.00 check as $5.00 but you should be able to catch that online. You can keep receipts to double check check card transaction if you can't remember for the couple of days it takes to post to your account and you can usually view images of checks you've written with your online banking. The totals, however, are done by computer and I've never seen a math error. Any time someone came in because their register didn't match the statement, it was always, 100% of the time, something the customer messed up.
So, the simple solution and the one that I endorse, is to simply stop using your register. As long as you can tell that you're not getting double charged (and you don't need your register for that) you don't need it.
posted by VTX at 8:11 PM on November 6, 2010
My recommendation is to stop using your register. There are a couple of things that the register does for you:
1. Lets you track your balance
2. Lets you see how you are spending your money
3. Makes sure you catch any math errors by the bank (IE they added stuff incorrectly or that transactions are entered for the correct amount).
You are already tracking your balance online and that gets update pretty fast if you're using a check card for most transactions (and you should be at least a check card/debit card if not a credit card but the why of that is a whole other discussion). In the last four years I've written two checks.
There are many other, better ways for your to track your spending. You can look online, use excel or quicken etc.
The bank simply doesn't make math errors any more. They and merchants sometimes make entry errors like entering a $50.00 check as $5.00 but you should be able to catch that online. You can keep receipts to double check check card transaction if you can't remember for the couple of days it takes to post to your account and you can usually view images of checks you've written with your online banking. The totals, however, are done by computer and I've never seen a math error. Any time someone came in because their register didn't match the statement, it was always, 100% of the time, something the customer messed up.
So, the simple solution and the one that I endorse, is to simply stop using your register. As long as you can tell that you're not getting double charged (and you don't need your register for that) you don't need it.
posted by VTX at 8:11 PM on November 6, 2010
Banks are currently 'manipulating order of payment to maximize fees'. Search string that term for more information. Wells Fargo recently got sued and lost in a class action law suit for this ethically underhanded practice.
posted by Muirwylde at 8:33 PM on November 6, 2010
posted by Muirwylde at 8:33 PM on November 6, 2010
Response by poster: The good news is I have an ATM card, not a debit card, so at least that limits my monthly transactions to a more manageable number.
I'm going to take all this advice and try to reconcile again. Thanks so much for even just making sense of my question.
posted by trampoliningisfun at 12:08 AM on November 7, 2010
I'm going to take all this advice and try to reconcile again. Thanks so much for even just making sense of my question.
posted by trampoliningisfun at 12:08 AM on November 7, 2010
On another note, do you MeFites have a better system for keeping track of your checkbook that is maybe a bit more foolproof? I've considered Mint.com, Money, etc.
I started using computer programs to track our finances 8 years ago and I've never looked back. I used MS Money for a while, then switched to open source programs like KMyMoney, then GNUCash (depending on the operating system I was running on my computer).
These type of programs are good and can do as much or as little as you need. Find a few to try out and it may help avoid issues like this in the future.
posted by unlapsing at 7:18 AM on November 7, 2010
I started using computer programs to track our finances 8 years ago and I've never looked back. I used MS Money for a while, then switched to open source programs like KMyMoney, then GNUCash (depending on the operating system I was running on my computer).
These type of programs are good and can do as much or as little as you need. Find a few to try out and it may help avoid issues like this in the future.
posted by unlapsing at 7:18 AM on November 7, 2010
This thread is closed to new comments.
posted by phunniemee at 3:32 PM on November 6, 2010