Bank balance does not balance

[Radiance]

I think, or thougt that the online balance should always be explainable by balancing the checkbook. I dont have to wait for month end to balance out.
THis is where I have failed thus far, the mistery steams from the days I didn't have a budget.

In any case, when the month is done I want to know how much was left over before my salary deposit comes in. Depending in how much is left I could decide to send some to my savings account or use it against paying off debt.

Let's say that by the time I get my salary deposit I balance out and have $257.38left from previous pay period. I could decide, in confidence to send 57.38 to savings. Right now I don't know.

So, I think this would actually work for me and it is the easier of the two:

2. When your deposit hits your bank write that amount down. Do not use any prior moneys that may or may not be there. Start from scratch basically. Follow the ledger thing above and hopefully within 30 days you should know exactly what is in the account.

I check my bank transactions almost every day, and I record and extract the moneys from the proper envelops. If the bank shows a charge of 31.43 at Shell, I record an expense for Gas under Transportation. So it comes to reason that at every point I should "agree" with the online balance. Thank you Cicy for the idea, I will do so 3/31!!! From that point on, I will be able to leave $200 on the account and the rest goes to savings.

[disneysteve]

If the bank shows a charge of 31.43 at Shell, I record an expense for Gas under Transportation. So it comes to reason that at every point I should "agree" with the online balance.

Make sure that the $31.43 charge the bank is listing is correct and matches up with your receipt for that transaction. Mistakes do get made and that is one thing that can definitely throw you off from balancing. Don't ever assume that the bank statement is correct.

[creditcardfree]

If one is tracking all their transactions in a register of some sort, whether on paper, excel or other application, and you know you have recorded everything, then the amount in your register the day before you get paid is the extra in your account.

Of course, as I think was stated earlier, you need to know that you balance is correct at some point to have confidence in the numbers. Once you get that clear and balance your checkbook regularly, as well as, record all transactions as they occur you will know your balance at all times.

I almost always transfer the extra to our second checking account each pay period. It ranges from a couple dollars to a couple hundred dollars, depending on the month.

[Radiance]

Make sure that the $31.43 charge the bank is listing is correct and matches up with your receipt for that transaction

ouch

I am not yet at that level of sophistication. All I do is ensure I recognize the transaction and that the amount makes sense. I dont keep receipts.

Anything from 30 to 33 is acceptable for Gas...I am not ready to check those pesky receitps.

[elessar78]

My one failure (among many) as an adult is I can't balance my checkbook. I have a system that is essentially a running total (written down) of deposits and debits from my account. I plan our spending 4–6 weeks in advance and I can cross reference between my online account and what's written down so I know the bank has not made a mistake.

The automatic withdrawal, I only have one, for our savings tends to throw the bank balance off because it takes a few days to clear. I've just learned to trust my system because I've been using it for 5 years with very few mistakes.

I've tried to migrate to software but I'm never as comfortable with it. One day I will get a programmer to write software that works around my system.

[disneysteve]

I am not ready to check those pesky receitps.

I have to say that this statement concerns me. You started this thread to ask why your account doesn't balance but now say you aren't ready to do what is needed to balance the account. I have had a bank cash a check for a different amount than it was written for. I have had a bank credit the wrong amount for a deposit I made. There are lots of errors that can and do happen. If you aren't checking each transaction, how can you possibly know if they are all correct? I will say it again. You can not assume that the bank is always right.

[Radiance]

I will get there, right now I register the gas expense on my envelop budget as the bank says it happened.
So technically if a mistake was made, I am copying the mistake into my records, therefore I should still be able to balance out anyway.

I will try to record start recording receipts in a month or so.

[disneysteve]

I just want to make sure I'm clear. Do you keep any type of written record of your transactions? I still do things the traditional way with pen and paper. If I write a check, I record it in the paper checkbook register. If I pay a bill online, I record it in the register. When an automatic payment is made from my account, I record it in the register. I don't use a debit card so don't have to deal with recording those transactions, but if I did use one, I'd record those as well. When I make a deposit, I record that in the register. Then when the monthly statement comes, I check my records against the bank's records and balance the account. It takes about 10 minutes per month and is quite easy. In fact, many months, my 14-year-old daughter does it for me and she has done so since she was 9. If the numbers don't add up, we figure out where the mistake was made. Usually, it was an error on my part but occasionally, I find a bank error.

[creditcardfree]

You either need to record the transaction as it happens, such as when you pay a bill online, or keep the receipt until you do record it. Don't wait to record it until it shows up at your bank. That is the main reason you can't rely on the bank balance, because it can be several days delayed from when you spent the money.

You can only rely on the balance you keep a running total of.

When I shop and use my debit card, I put the receipt in my purse. I record any receipts I have each day. I write a big 'R' on the receipt after I record in my register, so that I know that I have recorded it. I have an excel spreadsheet for this. If I pay a bill online, I record it immediately, even if the transaction won't happen for several days.

[Radiance]

What a drag, but I guess I have to get into the habit to do it and do it consistently . I do it for some things, but for others I record them as they show on my bank's site which I check daily or every other day. I don't write checks, mainly debit card so my transactions show at the third day the latest, over 90% show the same day.

I do have adversion to receipts piling on my purse, so when I register as the transaction happen (like at the grocery store) I do it via text message and throw away the receipt as I go out the dooor.

I think I was trying to avoid doble work; register on my personal system and then "mark" them as my bank clears them up. I see now why people balance out only once a month. I was trying to KEEP my checkbooked balanced at all times and I think that has been overkill, unefficient and almost impossible.

ok, so

1) Register transactions as they happen OR save the receipt and do it that night so I can throw it away
2) Balance the checkbook once a month only.
3) Check the bank website often to address any UFO (Unidentified Funny Overcharge)

Am I glad I asked this question... Still hate the idea of registering every transaction manually. Maybe will serve as a shopping deterrent:

[cptacek]

Radiance, I balance my checkbook more than once a month, especially when I am trying to eek out a bit more cash to complete a goal. If you want to keep closer eye on it, you can.

At my bank, you can log in online and see each transaction as it is credited or debited. I log in during the middle of the month and check things off, and balance to the daily balance shown on the web page. When I get the statement at the end of the month, I have a few checked off already, so I just do the remaining few weeks, and see if it balances against my spreadsheet. If it doesn't, check the whole month.

If you write checks, get duplicate checks. Then, when you are done writing the check, you don't have to record it anywhere when you are at the register...it already made a copy for you. Then, record it in your spreadsheet when you get home, or when you next balance your checkbook.

If you want to keep receipts (which you should for reasons other than balancing the checkbook...for instance returns back to the store, or tax reasons) but don't want to clutter up your purse, just put a basket or something close to where you drop your purse off when you get home and clear it out there every day.

I have always kept receipts, but my husband hasn't. It took him about 4 months of me nagging him (I swear I wasn't nagging, just asking for them every couple of days, but he thought I was nagging) and now he keeps every receipt too. It is so important for us because most of his expenses are farm expenses that we use to offset farm income, so if he doesn't keep a receipt, that costs us 10-15% (whatever tax bracket we are in).

If you don't want to keep receipts, you can use your phone to send a text to yourself. That sounds like a good idea.

Whatever you do, just get in the habit of it.

If the problem of balancing to the bank balance comes from before you started keeping track, you eventually have to reconcile that. If, after a few months, you have tracked everything and are the same amount "off" every time, just make another entry on your spreadsheet saying "reconciling to bank balance", put the amount in, and go on from there.

[minnie1928]

I have had a bank cash a check for a different amount than it was written for. I have had a bank credit the wrong amount for a deposit I made. There are lots of errors that can and do happen. If you aren't checking each transaction, how can you possibly know if they are all correct? I will say it again. You can not assume that the bank is always right.

As a banker for nearly 20 years, this is totally correct.

[cicy33]

One thing I have noticed lately and it irks me to no end is when I get fuel the bank will show a $1 charge for like 3 days before it finally shows the actual amount.

[disneysteve]

Still hate the idea of registering every transaction manually. Maybe will serve as a shopping deterrent:

One way around this, kind of, is to stop using a debit card. I've never used one and don't plan to start. I pay everything with a credit card. That way, there is only one payment to deal with each month but that payment may cover 30 or 40 different shopping transactions and other monthly bills.

Of course, you still have to make sure the credit card statement is correct, but it makes balancing the checking account much easier since there aren't nearly as many transactions to deal with.

[cicy33]

One way around this, kind of, is to stop using a debit card. I've never used one and don't plan to start. I pay everything with a credit card. That way, there is only one payment to deal with each month but that payment may cover 30 or 40 different shopping transactions and other monthly bills.

Of course, you still have to make sure the credit card statement is correct, but it makes balancing the checking account much easier since there aren't nearly as many transactions to deal with.

This is a good way to do it but only if one is very disciplined and of course has a credit card that has at least 1000 limit. Since you pay your bills that way I am assuming the general household spends that much. But it is too easy to just pay part of it. I know that I would be very tempted. think I will stick with my debit card.