Call me old fashioned, but I still regularly balance our checkbook.
I know, you are probably thinking that it is a complete waste of time considering that most banks now have online banking. Don’t worry, I utilize that resource just as much! So why double up? Remember the days of being able to pay for something with JUST cash or a check? I realized that since we switched to online banking a few years ago, I actually have a better idea of where our money goes, when I balance our checkbook. We are not “official” budgeters. We budget in the sense that we do not spend money on what we do not need. It’s as simple (or maybe as complicated) as that, but we have found through the years, that it has really worked well for us. When something comes up that we need, we discuss it, and if it’s needed, we buy it. If we discuss it and realize it can wait, we wait. I am thankful to be married to someone who is like-minded! We also do not make oodles of money, which is a lifestyle we actually really enjoy! So seeing in a checkbook, where our money goes, is very helpful for our lifestyle.
Whether you keep track of your money in a checkbook or not, I want to share some reasons why I balance our checkbook. Some of these reasons are more preventative than experiential, but nonetheless, important to me:
1. The bank could be wrong. Believe it or not, the bank could transfer your funds into the wrong account; or even enter the wrong amount! I am a “give them the benefit of the doubt” person, but you never know. We are all human – even bankers. That is why I like comparing our checkbook AND online statements, to make sure they match up.
2. Prevents overdrawing. Thankfully this is something we do not struggle with (because I balance our checkbook), but the overdraft fees of $25 or more, just aren’t worth my money!
3. The automatic deposit or general deposit may not be posted yet, causing insufficient funds. I am sure you have witnessed the scenario. Someone tries to use their bank card, but it says declined. The person says “but I just deposited my check”. That may be true, but it may be “pending”. Know when your bank posts their deposits!
4. Automatic bill payments, though I love them, I feel you still need to keep track of where your money is. If you just spent a lot of money at the grocery store, but again, it’s not posted yet online, and then an automatic bill payment has to go through, you could end up with insufficient funds. With balancing our checkbook, I put those amounts in right away, so that even when the bank does not have it posted, it is posted in my checkbook, as money spent.
5. Budgeting. Like I said earlier, we aren’t big on budgeting, but what I do enjoy about balancing our checkbook is seeing where our money goes. If I see 5 restaurants listed that month, I know we may have gone out to eat too often (though we are lucky if we eat our more than once a month) Being conscious of where your money is going, helps you save money in the long run as well!
For me, what it comes down to, is that as much as I enjoy online banking, it can give you a false sense of what you really have. Yes, it’ll balance itself out in the end, but for the time being, I think keeping a balanced checkbook is a safe way to go. With all the different ways to pay for something, such as checks, ATM, online payments, and debit cards, all those different options are just more ways to spend money. Choose a way that is right for you and always know where you are taking money out of, where you are putting it in, and how much you are spending!
Do you balance your checkbook? Why or why not?