Don't know how to balance a checkbook? Learn how in seven easy steps!

It's become an issue of central attention that the majority of today's high school graduates don't know how to balance a checkbook. Perhaps we shouldn't wonder why this is so. Practical skills, such as knowing how to balance a checkbook, aren't emphasized in the school room, yet by the absence of such knowledge, kids are falling into poor credit scores and a whole bunch of hassles as a result. Such a simple exercise can wreak havoc with both kids and adults who never learned how to balance a checkbook. Here's the foolproof method on how to balance a checkbook and keep your finances straight.

We'll start with a clean slate. You've opened a checking account with a $100 deposit. You write checks against that amount, make deposits, use the ATM to withdraw funds and also pay bills online with your checking account debit card. At the end of the month, you receive a bank statement. The amount differs from your calculations. Now what? Here are the seven easy steps on how to balance a checkbook.

1.Start with your beginning balance. In this case, you deposited $100 to your checking account.
2.Add in all your deposits. Most repeatedly, this consists of your paycheck. However, you may have received monies from other sources, such as cash receipts for babysitting or tax refunds. Keeping exact records is key.
3.Deduct all of your checks and card purchases, bank and ATM fees. If you used your check card to withdraw funds from your checking account, you must include any ATM fees and bank fees.
4.Determine items which are outstanding. Let's say you paid your phone bill online, but the payment has not yet been deducted. Add these amounts to your bank statement balance. Adding such amounts does not increase your definite bank balance. These additions only allow you to reconcile your records with the bank's figure.
5.This figure should agree with your bank statement.
6.Subtract outstanding items. You know the phone bill payment will hit your bank eventually, surely within a few days. Don't mislead yourself in assuming these payments aren't part of reality. This figure is what you have in the bank.
7.If you find a difference between your ending balance in step 5 and the bank's, track it down. These discrepancies are many times over easy to find. Let's say you find a difference of $39.95. That amount may ring a bell. “Oh yes, I forgot to record that purchase I made over the net.” Perhaps you find purely a $2.00 difference, in the bank's favor. Did you use an ATM which charged a $2.00 fee for the convenience? Did the bank make a blooper and charge you a $2.00 fee which was not a part of your checking account plan? Straighten these types of differences out straight away.

Learning how to balance a checkbook lets you know precisely what your available funds are, keeping your credit report clean and you, headache free.

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