How to use the Check Register
An Illustration of a Check Register
It Can Save You Money and Hassles
A check register is not just for writing check amounts. It can be used to record your running balance and/or ATM/Debit transactions. By keeping a running balance, you know what is in your account. You don't have to check your balance anywhere because you already know it. Also, you don't overdraw your account thinking you have more money because something hasn't been processed yet. Record any fees you know about as well. Then when you want that new gaming system (for example) you know whether you do or do not have enough money.
A check register slides into a pocket or purse and is easy to use. Keep your card with it using a paper clip or something similar and you will always remember to record the transaction. You don't need your checks unless you plan to write a check. Be aware, however, that some companies now take checks and process them electronically. This means that even though it is a check, the bank treats the transaction like an ATM/Debit transaction, meaning the money comes out immediately.
What Each Line is Used For
This is a breakdown of what each item is and how it can be used.
- The A1 lines are pre-printed and tell you the use of each column. The top box to the far right is for the balance from the previous page or completed register. If this is a new account, you would put the amount that you used to start your account on this line.
- The A2 line is for recording your transactions (what you put in or take out). It has two different colors because some people like to use two lines for explanations and some do not. It doesn't matter which way you use it since it is for your information. However, I strongly suggest that you keep it neat and readable. You never know when you might need to go back and check something.
- The first column (marked with an "A") is where you put your check number. This line is important because it helps you track issues and/or missing checks. If you void a check (make a mistake on it and can't use it), you should record the check number and write VOID in the transaction column marked with a 'C'(and on the check). I don't know how many times I have gone into my account to write a check and found a number missing. I would search high and low only to remember that I had to void it somewhere and asked them to throw it away after I wrote void all over it. Bad choice on my part! If I had kept it, I would at least have known that I voided it. If you use an ATM, you could either leave this box empty or write something like 'debit card' there.
Lines B To E
- The 'B' column is for the date of the transaction. Be sure to write it clearly in case you have to go back to it at a later date. If you are using two lines for your transactions (something I like to do because you can put down more information about the transaction) use the first line for the month and the second line for the day.
- The 'C' column is for writing who the check is made out to as well as why you wrote the check. Or, if it is a deposit, you would write a deposit in this section and perhaps a small explanation of what type. Using two lines makes this much easier because you don't have to squish everything on one small line.
- The 'D' column is for recording the amount of the transaction amount (or check amount). Payments and deductions from your account are all that goes here; note the (-) after the description which means this is an amount to be deducted from your account. Leave the lower amount line blank.
- The "E" column is the column used to ‘check’ off the items that have cleared (or been processed by) your bank--this will be on your bank statement (different hub). You should not use this line except for this purpose because it could be confusing when reviewing for payments or searching for errors. When I mark the items that have been cleared, I do it in a different color so it stands out.
Lines F To H
- The 'F' column is the column you would use to record any fees you might have from the transaction such as fees for using an ATM not affiliated with your bank (not all check registers have this column so don't worry if your register does not have one). Most fees are noted upfront when your transaction is made, however, your bank may also add fees for such transactions or for different services rendered. Use the first line for this amount, but remember to add it to your transaction amount before balancing your checkbook.
- The 'G' column is the column used for any transaction that adds to your balance such as deposits you make by hand or automatic deposits from work; note the (+) after the description which means anything in this column is added to your account. Use the first line for this amount.
- The 'H' column is where you will balance your register so that you always know how much you have left in your account. Put the transaction amount on the first line (include any fees that may have been charged or will be charged). Add or subtract the amount to the balance above it and put the new balance on the second line (if you are using two lines for your transactions). If you are only using one line, you don't need to put the amount of the transaction in this column.
A Completed Transaction
Because it is so important for you to keep your check register balanced, I have created a General Rules and Information about checking accounts, debit cards and ATM's section here.
Record Everything and Be Prepared
- Record everything: I cannot stress this enough-----record everything on your check AND in your check register. This will help you later on if any questions come up about the transaction. For instance: did you pay last week's electric bill? Look back in your register and you can see that you paid it on ______ date in the amount of _______ and the confirmation (transaction or check) number is ___________. This is why it is so important to keep it neat and readable. And don't count on the bank being correct. They can, and sometimes do, make mistakes. If you don't have a number for the transaction, write where you used the card or what you bought.
- Be prepared: Be sure to record any fees, additional costs or charges, additional information, etc. in the register before you calculate your balance. Don't wait 'until later' or you might forget a crucial piece of information (like a $1.00 charge from using an ATM). Items like this could overdraw your account. Fees are usually noted up-front, but sometimes it is a hidden fee; for example, your bank charges a fee for ATM transactions that are not done on their own ATM. Even if the ATM says it takes your bank account, it may not be within your bank's system. Hidden fees are sometimes impossible to account for until you actually get your bank statement, or you have done the transaction before and know the fees already. This is why I try to leave a $25.00 balance in my account at all possible. Also, ask your bank for a list of fees that might be charged against your account so you are not caught completely off guard when your bank statement comes in and you find extra money taken out.
Cocoa Is Trying
Calculate Your Balance Immediately
Or as soon as possible so you always know what you have in your account. It is very hard to be in a hurry, look at your register and see several payments or checks that have been written in but not balanced. I don't know about you, but I would be calculating on the back of the register or my hand to see how much I have left to spend because I can't calculate all that in my head. When all else fails, you can try to round out the amounts. Sometimes taking the receipt and clipping it to the register can help you remember the amount of the transaction.
An example of rounding out the amounts for a quick idea of your balance amount: you have three transactions for which you have not balanced your register. The amounts are $17.49, $43.17, and $135.74. Round them up (always up) and then add quickly to get a general idea of what will be taken out of the balance which is $627.01. So $17.49 becomes $18, $43.17 becomes $44 and $135.74 becomes $136. Added together you get approximately $198. Take that from your balance (also rounded) and you will get: $627 less $198 which comes to approximately $429 left in the account. When rounding the balance amount try to round it down rather than up. This will help keep you from under-guesstimating your balance.
I strongly recommend that you do not make a habit out of balancing this way since it is too easy to make a mistake and rounding means the numbers are not accurate. Always try to accurately balance your register whenever possible. Errors in calculating now can lead to overdrafts later which can cost a lot of money.
Did You Know
- Banks generally process today's transaction tomorrow but don't use that to float the balance because eventually it will be taken out.
- Saturday and Sunday transactions may not be processed until the following Monday.
- Bank branches are run by different people which means they may have to ask for ID even if you bank with them.
- Banks can make mistakes.
- Banking with a bank without reading their policies and procedures will usually cost you money.
- Some banks are actually run by a mother company.
- If a bank charges an account fee, be sure to record it before you begin spending.
Never Use An ATM To Check Your Balance
If you check for an electronic balance using an ATM, you need to remember that some items that you have paid may not be recorded by the bank or even received by the bank; for instance, in the case of a check or out-of-state payment. You can't count on that balance amount being correct. It is as up-to-date as the bank can get it. But, if you look at the situation like a math problem, it would look like this:
- Bank balance minus charges you have made but that have not reached the bank equals actual bank balance.
- Using numbers: if you have a balance in your account of say $300 based on your electronic balance but you know you just paid for lunch and gas, you should deduct them accordingly. So $300 - $15 (lunch) - $20 (gas) = $265. Since it is difficult to determine what the bank has not yet received when using an ATM, it would make more sense for you to use the balance you have in your check register instead.
Some businesses (like gas stations) have the right to 'hold' a certain amount from your account until the actual amount clears the bank. Try to ask about this before you use your card. I find that the businesses around me will generally put a $50 hold on my account unless the actual amount is larger. If you use your credit card instead of a debit card, the hold doesn't affect you as much.
This amount will not usually show up on your account, but you will not have access to those funds until the business transaction has cleared the bank in a day or two. Paying $20 for gas using a debit card can mean that $50 of your money is not available until the bank processes the $20 transaction. Frustrating, but true. Also, banks can put a 'hold' on checks you have deposited, usually for 7 - 10 days. The amount of the check will be in the account balance but will hot be usable until it clears.
Keep Your Receipts
Keep all of your receipts and check your register to be sure each payment or charge is recorded before filing the receipt away for future reference. You will be surprised how important this step will be when balancing your check register to the bank statement. If you come to an amount that does not match what you have in your register, you can pull the receipt from your file to compare and to prove that a mistake was made. This will also help you spot fraudulent amounts that you did not make.
Using the Memo Line
Record information on the memo line of your check as well as in your check register so you remember why you made the payment or wrote the check. This comes in handy in the future when you need to prove to someone that you made a payment. It can also help the company apply the payment to the correct account if the account number is there. It only takes a few moments but it can pay off big time in the long run. For example, this is a true situation, a check written for $250 was taken by the company and the bank as $2.50. Needless to say, the bank tried to say they had done nothing wrong and said they could look up the actual check. They were told that would be a very good idea. Oops, the bank was wrong, and so was the company that processed the check.
- Check Register: A small book filled with rows and columns that are used to record transactions and keep track of your account balance.
- Transaction: Any money exchange that you do. Some examples are deposits, ATM Withdrawal, Check Payments, and fees.
- Bank statement: A bank statement is a record sent to you by your bank telling you what has been taken out of your account and what was put into it over the last 30 days. Use this record to see any hidden fees, unknown withdrawals or deposits, and balancing of your account for accuracy.
- Overdrafts: An overdraft is when the amount of money taken out of your account is more than the amount of money you have in your account. Errors in balancing, recording of transactions, unrecorded fees, etc. can cause you to overdraft your account. Overdrafts will mean extra charges and fees not only from the bank but sometimes from the company that you paid or from which you made a purchase.
- ATM: Automated Teller Machine, in other words, a mechanical teller.
- Memo Line on a check: A check has lines for the date, the name of the person to receive the money, the amount of money in numbers and written out and a line for your signature. To the left of the signature line, there is a line marked 'memo' or 'for your records', or something similar. On this line, you can write different pieces of information for your records'. For instance: you could write 'payment for July Rent'. This tells you and the landlord that the rent check is for July. There is no restriction or requirement for this line because it is for your information. I generally put account numbers there.
Keeping Track of Your Balance
It doesn't matter what you use to record your transactions as long as you keep a running total. Even notebooks will work since the record is for your information. Keeping a running balance is not for everyone, I know. We create our own way of keeping up with what we have and, if it works, use it. If even that is more than you like to do, then I strongly suggest you keep all of your receipts and check them against whatever record you are using. Keeping track of your balance is the only way you can know how much money you have to spend. It is the best way to keep from overdrawing your account and getting added fees and penalties. Even small fees can cost hundreds of dollars if it over drawers your account. You don't want to overdraw your account. Keeping a running balance is the best, and ultimately the cheaper way, to know your balance.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2012 Cheryl Simonds