Keep Your Checkbook in Order

Perhaps you have long ago developed this simple skill, but if not now is the time to develop a consistent practice of entering checks into your register at the time you write a check.

It is very easy to write a check and not enter it immediately in your check register. But this bad habit, which many have allowed to persist, is one you don't want to plague your life.

For numerous reasons, including avoiding overdraft fees and credit rating disasters, it is important to keep careful track of your account balance. The best way to do this is to enter all transactions immediately.

Along with this, it is important to compute the balance often. It isn't necessary to do this on every line but rarely should more than four or five entries be made before doing so. You can determine when you need to do this by observing whether you can mentally calculate your approximate balance easily. If not, do the math.

Now that many of us do a lot of online banking it is easier than ever to let bad habits develop in this area. It is just as important, in some ways more so, to enter electronic transactions into the checkbook at the time of the payment.

Don't just stack printouts of your online payments on your desk to enter later. And don't forget automatic payments either. Write a list of these, ordered by date, on a 3x5 card and keep them in your checkbook or work out some other method that will enable you to consistently enter these payments on time.

In addition, enter the correct amounts and calculate the balance precisely. It is amazing how many people round off numbers or don't record some deposits or bank charges as they really are. No surprise that banks make such enormous profit from overdraft and other charges.

One of the biggest problems with failing to record the exact amount of deposits and expenditures, for example, is that it becomes impossible to find errors that may occur elsewhere. Even large errors are difficult to spot when you don't know exactly the amount you are off.

Only by balancing to the penny and then comparing that to your bank statement can you avoid serious problems with your account. With identity theft and other issues as common as they are, it is more important than ever to notice any inconsistencies in our accounts. Only when the numbers are precise can we stay in control of our money.

The best way to approach this issue is to make and apply a no tolerance policy toward neglecting entries. Hit and miss doesn't work. If you make no exceptions, no matter where you are (even with a long line behind you at the grocery store) to enter the check and amount, you will succeed easily. It just takes making a firm decision and then following through on it.