A balanced checkbook is perhaps the most important measure of your financial well-being.  Daily, monthly or yearly, the rate at which your finances change requires constant adjustments to your habits.  Maintaining a healthy flow of earning and spending is easy for most people.  But with more awareness of your habits, you can improve your ability to save.  Whether it be for the attainment of long-term financial goals or in order to live more responsibly on a day-to-day basis, it can be helpful to know your most up-to-date financial status at any given moment.  Here is a step-by-step guide to balancing your checkbook with regards to a monthly budget.

Check Current Balances

First, take stock of how much money is in your bank account currently.  This can be done with bank statements received in the mail, with a visit or phone call to your bank, or with an online banking account.  Once equipped with your current account balance, you can begin to balance your checkbook by adding and subtracting from this number.

Account for Income and Expenses

This is the most crucial part of the checkbook-balancing process.  Thoroughness is extremely important.  Make a list of your monthly expenses.  Rent, utilities, groceries, entertainment, gas, and insurance are some examples of the most common monthly expenses.  But these are the easiest to remember, so make sure to also account for the little expenditures and extraneous charges that may be less obvious.  Sprinkled within these regular deductions will hopefully be deposits from your paychecks.  It is just as important to keep tabs on your income because money earned that is unaccounted for can be forgotten or misplaced.  Once you have subtracted all your expenses from your balance and added all your credits/deposits, you will have a figure that represents your current bank balance.

Double-Check your Math

It is important to verify that your calculations match your bank’s numbers.  Once you have arrived at a balanced checkbook, call or visit your bank to see if your numbers match those of your bank.  This step can help you find any unaccounted expenses or income, but also keeps you in touch with your bank.  Sometimes, you may have a running expense from an unknown source that is not in your budget, such as a monthly application service on your phone, or bank charges for minor transgressions.  By checking your math against that of your bank, you can determine whether or not you have accounted for all your expenses and income.

Repeat Monthly

Repeat this check-balancing process as often as you need to in order to manage your money.  Once a month should be enough, but sometimes it helps to balance your checkbook after each paycheck to make the most out of your income.