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How To Balance Your Bank Accounts Each Month And Why You Must Do So

To be able to achieve a good financial state, you have to learn how to balance your bank accounts each month.

ways on how to balance your bank accounts each month

When you have multiple bank accounts, it is sometimes tempting to just let things be and not mind how your funds are going. But in reality, you actually need to.

If you want a good financial picture, it is important to learn how to balance your bank accounts on a monthly basis.

Balancing your bank accounts is as important as tracking your expenses every month. Tracking expenses is about knowing where your money goes, where you spent it, and how much is left. Knowing all this will make things easier for you especially when you find yourself overspending. You’d know which ones to adjust when it comes to your spending habits.


As with balancing your account, specifically your checking account and credit cards, to the bank statement on a month-to-month basis, it allows you to see any spot problems in your account that you need to deal with, which can lead to preventing overdrawing.

So, it does not matter if you are tracking your bank accounts with a pen and paper or you are using financial software. The thing is — you should not neglect this process.

To help you understand better what we mean by that, we are sharing with you a few reasons why you need to allot time to balance your bank accounts.

But first, let’s talk about how to balance your bank accounts each month.

So, it does not matter if you are tracking your bank accounts with a pen and paper or you are using financial software. The thing is — you should not neglect this process.

To help you understand better what we mean by that, we are sharing with you a few reasons why you need to allot time to balance your bank accounts and how to balance your bank accounts each month.

But first, let’s talk about the following first:

  • What balancing a bank account means?
  • How balancing accounts help you?
  • When to balance bank accounts?


Whether it be your checking account or credit card account, balancing is essential. Doing so helps ensure that the funds you think should be in your accounts is actually in there when you need it. It’s ensuring everything is intact.

Balancing a bank account simply means taking stock of the money that’s going into your account, and then going out of the account. It also includes ensuring that the bank account balance is what you expect it to be.

Basically, the goals or aims of balancing a bank account include:

  • Being able to match your records with the bank’s records
  • Catching mistakes early on — mistakes that can lead to bank charges or worse, identity theft
  • Figuring out how much funds you have left

By the way, we thought it’s important to note especially to those who prefer to use their bank’s online app in checking balance that according to an article published by Forbes, what you see in it is not necessarily the actual or real-time available balance as there are moving parts (like checks issued that were not deposited yet). That is why it is always best to counter-check with the regular bank statement.


Another thing that helps you understand better the importance of balancing your bank accounts is knowing the reasons why you need to do it. Once you know the reasons, it’s easier for you to get convinced that indeed, you need to work on balancing your bank accounts monthly.

With that said, allow us to share with you how balancing bank accounts help you.

First, it helps in setting a budget for any upcoming expenses.

Second, balancing helps prevent checks from bouncing and getting charged for overdraft fees.

Third, it helps you identify any mistakes that either you or the bank has made.

Fourth, it helps you from becoming a victim of identity theft.

Lastly, you get to check how much interest you are earning. This way you can compare between banks — which one gives a higher interest rate, or which one is better when it comes to interest rates.

Know more about balancing your bank account in this informative video by Great Lakes:


Now that you already know the importance of balancing bank accounts, and also the reasons why you should do so, this time around, let’s talk about when is the best time to balance your bank accounts.

Balancing your bank accounts has to be done on a regular basis, thus, the reason why we kept saying do balance your bank accounts on a monthly basis. The more frequent you check, the better.

The least you can do it once per statement period. Never let a statement period pass without checking or balancing your bank accounts.

Also, to avoid bouncing checks, make sure to check your balance first before spending anything from the account. You do not want to get into any hassle, right?


So, before learning how to balance your bank accounts each month, let us first understand why you have to balance your bank accounts in the first place.

Here are some of the common reasons why:

1. It helps catch mistakes you made.

We mentioned this earlier. Balancing bank accounts on a regular basis or on a monthly basis helps you get rid immediately of any mistakes done by either yourself.

Perhaps this one is the very reason or one of the biggest reasons why you have to balance your bank accounts.

Imagine if something’s wrong and you catch it late? Do you think the process will be easier? We do not think so — unlike when you catch a mistake immediately, the process of solving the mistake or the problem would be a lot bearable. A lot easier — for sure.

Mistakes are common, but then, since we are talking about money,  as they say, every centavo counts, right?

No matter how little the impact of the mistake is, at the end of the day, it still made an impact on your account.

To put it simply, balancing your bank accounts will help you catch mistakes in your account, at the same time, help prevent you from accidentally overdrawing.

2. It helps you see mistakes made by the bank.

Just like you, banks are imperfect, too. They make mistakes, too. Well, generally, making mistakes is inevitable, right?

However, you won’t be able to notice these mistakes if you are not frequently balancing your bank accounts.

In order for you to catch a mistake, you need to check your bank account regularly. Who knows? You may not realize that there’s a deposit missing or that there was an unauthorized withdrawal.

The good thing with banks is that there is a paper trail that they use, and you, as a customer should be able to work with your bank in correcting mistakes or errors.

Again, that will only be possible if you catch the mistake soonest. As we have said, the earlier you catch a mistake or an error, the better.

3. It helps you track your spending.

Of all the reasons why balancing bank accounts is important, this probably is what really catches our attention.

By balancing your bank accounts, you get to see you spending habit. You get to track where your money went — what things did you buy, bills you paid, etc.

Tracking your expenses is easy by using a personal finance software that provides a running balance. There are a lot of them to choose from online — some are free, some you need to pay to avail such services and tools.

Once you enter a certain transaction into the app or the finance software, it will automatically track your spending. This way you will know when it’s time to stop. At the same time, you’ll know how much money left in your account.

Furthermore, by using such software, it will help you plan for the annual expenses because you can look back over your spending for the whole year. It will allow you to see things that may have slipped your mind to include in your budget.

4. It helps you see where you are financially.

Unless you have so much, then tracking your spending won’t probably be a big deal.

However, if you are living from paycheck to paycheck and that money is tight, then we highly recommend you carefully track your spending to ensure you do not overdraw your account.

Overdrawing can easily happen especially when you are married and both of you are accessing the account.

Balancing your bank account is so important to know where you are financially, and how much money you have left before your next paycheck.

This also helps you adjust your spending — if you think some of your expenses are worth giving up, then do so to ensure you have enough in the bank.

5. It helps you unnecessary fees.

When you regularly balance your account, it’s easier for you to catch any small fees or mistakes that may not seem like a lot on the surface.

For example, in an instance, you may have remembered being charged for an ATM withdrawal you made, but upon checking you see an additional fee being charged by your bank for using a different bank’s ATM.

While these fees may be small, not accounting them in your balance may end up overdrawing your account, and in turn incur even higher fees, which is something you do not want to happen, right?

6. It helps you catch any fraudulent acts.

In this day and age, with technological advancements and the internet in place, identity theft is becoming more common.

There have been a lot of cases when hackers hack banks’ systems, or in some cases, the debit card information is stolen elsewhere.

Unfortunately, once the thieves have your information, they will use your card to make online purchases and of course, the bank will charge you for that.

However, when you regularly balance your bank accounts, such fraudulent acts can be immediately resolved.

Today, banks and credit card companies provide a certain period of time which lets you report fraudulent charges. The period of time usually runs between 30 and 90 days from the statement date.

If you are unable to catch the act soonest, this may lead to a bigger problem. Well, you may end up paying for something you did not purchase, which is really painful.

7. It helps your discover missed automatic payments.

For instance, you set up automatic payment for medical bills, insurance, and others. Ideally, it should go through smoothly. However, there are times a system glitch happens especially when a company switches over to a new system.

When this happens, there are instances when payments are not processed.

While it may not be a big deal for some, problems may arise though is for example your insurance is being canceled for payment failures or that you are charged for certain fees.

This type of scenario, however, can be avoided if you regularly balance your bank accounts.


So, we have already tackled the whys. This time, let’s talk about how to balance your bank accounts each month?

When balancing your bank accounts, you may opt to either use a pen and a paper or you can do it electronically by either building a spreadsheet or using basic accounting software or finance management apps (there are a lot of them these days).

Now, when you using a pen and paper, you will basically need the following items:

  • Your most recent bank statement (The easiest way to access your bank statement is by logging in to your bank account online.)
  • Your check register
  • A calculator (or you may opt to use your mobile phone calculator app or use your computer)
  • A note pad intended for this purpose
  • …and of course, a pen!

When balancing manually, you can either make your own template, or you may opt to follow templates that are available online. Yes, there are several templates available online. You just have to search them over Google.

Meanwhile, if you are opting to do them electronically by using a spreadsheet, you will basically need the following:

  • Your computer or tablet (or mobile phone)
  • Your most recent bank statement
  • Your check register

The things you need are basically the same when using an app. Although normally, it’s easier to use an app. You basically just have to create an account and create your bank accounts, and then use the tools provided by the app — these are financial management tools that are easy to use and understand.

Now, apart from these things you need, balancing your bank accounts would be successfully done if you:

  • Assess Your Account Balance – Once you started balancing your bank accounts, make sure to take note of your month-end account balance from the statement or if you are using an app or online system, you can easily access it through by logging in to your account online, or you may check through an ATM or via SMS.
  • Look For Outstanding Transactions – Make sure to look through your check register for transactions that do not have a checkmark next to them. These are transactions that did not appear on your bank statement. Most often than not, these are outstanding checks, which are checks you have issues or written but have not been deposited yet by the recipient.

Make sure to add all of the outstanding deposits, and write the numbers on your note pad or take note of it in your phone or laptop. When writing, place it next to the word “Deposit”.

After, add up all outstanding withdrawals as well. These transactions must be written next to the word “Withdrawals” if you are taking everything down on a piece of paper.

  • Compare Your Check Register to Your Bank Statement – Comparing what you have in your check register versus what’s on your bank statement is actually one of the best ways to find mistakes or errors. Make sure to place a checkmark next to items that match.

Should there be items missing from your check register, add them — unless of course, you think these are bank mistakes, then you have to contest them. Items may include ATM fees, interest earned, as well as overdraft fees.

  • Add the Numbers – Once you are done doing everything, the last thing to do is to do the math. You basically just have to add “Bank Balance,” add “Deposits,” and then, subtract “Withdrawals.” The result of this computation should be the very same amount your check register shows. If there are discrepancies, then go check with your bank immediately.

That’s basically it. If you come to think of it, the process is simple. In fact, it won’t take much of your time. You can do it once a month, and for just an hour or two – even shorter if you are using an app or a finance system.


Financial management is very important – that is if you want to keep track of your funds or your hard-earned money. Tracking your expenses is one of the common ways to manage your money. Just the same though, balancing your bank accounts regularly is also essential.

By doing so, you get to address any immediate concerns regarding your account. If there are mistakes or errors in your account, you can report it soonest to the bank and have it fixed. But more than anything balancing your bank accounts is ensuring that your funds are intact, and also it allows you to avoid overdrawing.

So, having said all that, do you now find balancing your bank accounts regularly essential?

Just keep in mind that as long as you know and you understand how to balance your bank accounts each month, then, everything should be smooth-sailing. Needless to say, your funds are surely secured.

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