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Do you still write checks? I don’t. In fact, I haven’t written an actual check in over 2 years. Instead, I prefer to use my debit card for almost everything. My debit card earns me cash back, it’s quicker, easier and really I just prefer to swipe my card instead of taking the time to write a check. While my debit card (and yours) is much more convenient, it also makes things so much easier to get in trouble with your budget. For that reason alone, you should be balancing your checkbook…even if you don’t write checks.
Why You Should Balance Your Checkbook (Even if You Don’t Write Checks….)
It is so easy to get in over your head with a debit card and in truth, I should use cash more often, but I don’t. I find that I actually spend more when I have cash than I do if I have to check what my bank balance is. If you’re not making sure that your checking account is balanced though, you could easily find yourself in deep trouble. Why?
With most debit cards, different transactions will run in different ways and yes, if you shop online at all, it is unavoidable. Some transactions run as credit and take a day or two to come out of your account. Some run as debit and the funds are taken out of your account immediately. You can use debit every single time you shop in person, but with online purchases, you don’t always have that option. Some businesses allow you to choose, but some don’t and require you to run the card one way or the other. In other words, if you aren’t paying attention, you could easily overdraft yourself without too much work. Be honest. Have you ever accidentally overdrawn your accounts?
Checks and debit cards both draw funds from the same account. Your checking account! I know, you knew that right? Please stop looking at me like I’m an idiot now because sometimes it can be extremely easy to forget that little fact especially if you have more than one person withdrawing money from your checking account. If you have more than one person who uses a card or check drawn on that account, doesn’t it make sense that you should sit down and make sure the money is there? If your partner or spouse spends money and you don’t know it, you may accidentally spend that money too. Making sure you balance things weekly (at the very least) can help cut down on accidentally spent money that is already earmarked for something else.
There is a reason that the bank gives you a checkbook register when you open an account. Yes, it is to help you keep track of physical checks you write, but it is also to help you keep track of your debit card purchases. In fact, if you’ve never noticed it, your register actually has a spot to code in the debit card transactions and they all generally use the code “DC” as an example as to how you’re supposed to code it in your register. The fact that those codes are listed should show you that you need to be writing those transactions down at the very least. I’m sure you’re currently tracking your expenses and writing them all down, right? No? Get to it!
I get it though. Writing them down is one thing, but actually taking the time to balance your checking account? Well that is an entirely different ballgame. Balancing your account takes time, it takes knowledge and yes, it involves the dreaded maths. Maths are evil in case you weren’t aware. 🙂 However evil they may be though, they’re necessary and when you take the time to make sure that your accounts actually match what your expenses are, you’re proving to yourself that you are still on budget. We all know how easy it is to get off budget.
When your checkbook and your check register match, that means that you are doing well on your budget, you’re not overspending and you’re not running around like a chicken with its head cut off trying to figure out where your money went and how you’re going to pay the bills. You know exactly how much money is in your accounts and exactly how much of that money can be spent.
So when was the last time you sat down with your bank statement and your transaction tracking notebook and actually took a look to see if they matched up? Were you on track? Off track? Pleasantly surprised or sadly disappointed?