Maybe it was you in your dorm room at college. Maybe your mom at the kitchen table. Or maybe it was this one time in a high school blow-off class you kinda wish you hadn’t blown off called something like “life sciences” where the teacher (most likely a coach) taught you things about personal finance and laundry or something.
At some point in your life, you’ve probably balanced a checkbook or seen someone do it. And no matter your generation, from Zoomer to Boomer, including that one oft-forgotten generation and the one people can’t stop blaming for killing things that sucked anyway, we all have to be asking ourselves one vital question: Do we really need to balance our checkbooks anymore? Like, honestly. What is the worst that could happen?
Do You Still Need to Balance Your Checkbook?
In the interest of full disclosure, when I pitched this article, I was going to make the misinformed and frankly disingenuous argument that everyone still needs to balance their checkbooks.
That’s what most of the articles that come up when you search for “do you need to balance your checkbook anymore” say. And I drank the Pepto Bismol-flavored Kool-Aid for a while. I was prepared to argue that you should — even though I quit because it was giving me an ulcer. I was going to tell you that of all the ways I’ve tried to track my money, balancing my account with a check register once per month was the best when it honestly wasn’t.
But those articles and my original angle for this article are wrong for a really big and continually growing group of people.
Maybe you’re one of them. It depends on your spending habits, preferences, and whether you still regularly write paper checks. And “regularly” is the operative word there.
If you whip out that checkbook almost as frequently as most people use a debit card — at the supermarket to pay for groceries, your desk to pay the bills, your bank to get some cash — then you can stop reading.
Just bookmark this article for later when you finally kick the habit.
But if you’re being held hostage by late adopters and only have a checkbook to pay rent or just don’t use checks at all anymore, you can probably stop balancing. If you “write checks” through your online bank account, you can most likely skip it too.
You’re not out of checking in on your bank altogether, but actually balancing your checkbook is often wholly unnecessary if you use modern payment methods. To understand why, it’s helpful to remind yourself what balancing a checkbook entails and why you do it.
What Is Balancing a Checkbook?
For those in need of a refresher, balancing a checkbook is comparing the info you recorded in your check register to your bank statements to ensure they both say the same thing. The goal is threefold:
- To ensure neither the bank nor you (mainly you) made any entry or calculation errors
- To ensure there were no fraudulent transactions or vendor errors
- To ensure you know exactly how much money you really have to spend at all times
As you make transactions, you list the dates, amounts, transaction or check numbers, and payees in your check register. Then, you subtract the amount from the total to keep a running balance. That way, you always know how much you can safely spend, even if a check hasn’t cleared your account yet.
To balance it, you compare your register to your bank statement or online bank account, checking off any amounts you confirm. You may even have to go back through your check register and redo the math if you screwed anything up.
Then you have to account for all the stuff that hasn’t cleared yet — the stuff your bank doesn’t know about. If you find errors on your part, such as transactions you forgot to write down or transposed numbers, you must correct them in your register. If the errors belong to the bank, you must contact the bank to correct them.
It can be a long and arduous process for those who have a lot of transactions each month. It’s definitely enough to motivate you to use cash — or at least stop using checks.
Modern Payment Methods & Your Bank Account Balance: A Match Made in Heaven
Any payment method that doesn’t use paper is pretty much instantaneous. Those that aren’t, such as e-checks and preauthorizations, usually only take a couple of days to process. And even then, you can see them pending in your bank account quickly, usually within a few hours if not immediately. That includes the electronic checks you “write” through your online bank account.
Because the whole transaction happens online, all the electronic systems, like the bank, debit card processor, and ACH network (the Automated Clearing House for checks and e-checks), can communicate about fully electronic transactions from the very beginning. Since the first step in processing an e-check is ensuring you have the funds, you don’t have to wait until the check details finally get entered into the system and approved.
Plus, when it comes to electronic transactions, the information goes into the system once. From there, it transfers to the correct network directly rather than being rekeyed and introducing another risk of error. And there’s no handwriting involved, so that’s not an issue.
Because of that, once you see the right number and approve it, it shouldn’t change. That’s true whether you key in the number yourself or pay the amount recommended by the vendor. What you see is what should go through. That means these electronic transactions have a much lower error rate than old-fashioned methods like paper checks and cash.
That doesn’t mean errors are impossible, but they probably won’t be the fault of the bank. Either you or the vendor probably screwed up.
Paper Checks vs. Your Bank Account Balance: A Battle Royale
Paper checks take forever to clear. You can read about it in detail in the E-checks vs. Paper Checks section of our article on how e-checks work. But long story short, checks have to go through snail mail at least twice after you submit them — and three trips through the post if you mail the check to the recipient in the first place.
That means it could be a few weeks from the time you write it before it fully clears your bank and you can confirm no one keyed in the wrong details or a human or machine misread your henscratch along the way. And that’s if they cash it immediately.
Because of that, you need to use a check register and balance it at least monthly. It’s the only way to know how much money’s available to spend. Your online account simply can’t show paper transactions it doesn’t know about yet — and won’t know about for another week or longer.
How Common Are Bank Errors?
There’s this persistent myth that banks make errors left and right. Personally, I blame Monopoly. Play often enough and you’re sure to get a bank error in your favor. Or maybe it’s just that no one ever wants to admit they made a mistake.
Whatever the case, if you live in fear a bank error is going to destroy your finances, there are a couple of things you should know.
A Balanced Checkbook (Probably) Won’t Catch a Bank Error
Bank errors just aren’t that common these days. That means the (unlikely) prospect of catching a bank error isn’t justification enough to waste an hour or more balancing your checkbook each month. And that’s true even if you use paper checks.
I did an informal poll of people I know, and no one, even those who balanced checkbooks in days of yore when paper checks were all the rage (hi, Mom!), recalls the bank actually making an error in depositing or cashing checks.
So I looked for hard numbers on bank errors. I couldn’t find anything recent, but what I did find points to relatively few errors on banks’ parts. For example, MarketWatch reports that the Office of the Comptroller of the Currency, the regulator of national banks, only had a couple thousand total error reports in 2006 and 2007 despite having over 25,000 total complaints.
A 2014 report by the same office notes that number spiked to almost 100,000 total complaints in 2010 before falling back to roughly double the 2007 amount in 2013. But again, those are total complaints, not error reports. If it followed the same pattern, you’re talking around 8,000 error reports in 2010 and 4,000 error reports in 2013. That’s not that many errors in the grand scheme of things.
Banks Are Smarter Than You Think
Bank errors are rare because there are several failsafes, such as you checking the bank teller’s numbers and a human checking any check-scanning software’s numbers and vice versa. Even before that was possible, a second human checked the first human’s work before your check ever left the bank building.
I once deposited a rather large check at the bank drive-thru and asked for several hundred dollars in cash. I counted it before driving away, and the amount was wrong. I was nervous the teller would argue with me despite my not having left, but she could see the error on her end because there’s a failsafe for that too.
So bank errors aren’t impossible. They’re just unlikely, and when they do happen, they’re often easy to verify. But they aren’t the primary reason to balance your checkbook, either. Knowing how much money you have to spend is. And online banking is just way better at tracking that than you are — unless there are lots of paper checks involved.
Is Balancing Your Checkbook Worth the Effort?
Look. Balancing your checkbook isn’t completely useless in the 21st century. It’s just mostly useless.
And there’s a big difference between mostly useless and all useless. Mostly useless is slightly useful. With all useless, there’s usually only one thing you can do. Go through his clothes and look for loose change. Wait. That’s “The Princess Bride.” (Give yourself 20 bonus points if you recognized that before I said anything.)
My point is that for some people, there are benefits to balancing, so you should know the pros and cons before taking the leap.
Reasons to Balance Your Checkbook
You can get many of the benefits of balancing a checkbook some other way. But that doesn’t mean it’s not the preferred way for some people.
Paper Check Writers Can Keep Better Track of How Much They Can Spend
If you use paper checks, your check register is the only place you can see how much money you have at all times since it can take up to five days for a check to clear (and show in your online bank account) once the recipient cashes it.
It Lets You Thoroughly Audit Your Check Register
Balancing your checkbook entails a deep-dive into your bank account that can help you find errors in your check register. If you still keep a check register and rely on the total, it’s important that it be accurate. But be honest. You’re looking for your own errors here.
You Can Check the Bank’s Accuracy
It’s unlikely the bank is going to make an error, but it can happen.
Don’t get me wrong. The biggest banks are corporations, and I don’t trust any corporation as far as I could throw its board of directors. But there are wa-a-ay easier and more profitable ways for them to take your money than a dollar here and there from your account. They’re already investing it and (mostly) not sharing the proceeds.
It Helps Catch Fraud & Vendor Errors
Balancing your checkbook will help you catch fraudulent transactions and maybe even identity theft. It can also help you keep an eye on vendors to ensure they didn’t make mistakes or double charge — not that balancing your checkbook is the only way to catch either one.
It Highlights Bank Fees
Remember when I said there are easier, more profitable ways for banks to take your money than steal it? Fees are one of those ways. Of course, you’ll see bank fees if you pay any attention to your account whatsoever. But balancing your checkbook may bring them into full focus for some.
It Helps You Double-Check Automatic Payments
Unless you live some kinda charmed life, you’re unlikely to forget you have to pay your gas bill monthly. But regularly combing through your bank statement ensures you see smaller-dollar automatic payments it’s easy to forget about, like subscriptions to online services you haven’t used in a while.
Or you could just keep a running record of what monthly bills you pay, regardless of dollar amount.
It Helps Account for Preauthorizations
Merchants like gas stations and hotels don’t always know the final charge when they initiate a transaction. So they use preauthorizations, which are transactions in which a company puts a hold on funds in your account.
The preauthorization could be as little as $1 or as much as their estimate of how much you spent. For example, if you’re having groceries delivered, the delivery service might put a hold on your account in the amount of the goods you have on your list. But that amount may later change if the company made a substitution during fulfillment.
Preauthorizations usually only take a couple of days to clear at most. But they can take up to eight days before the vendor is in trouble. That’s only a problem if the preauthorized amount is wildly off, such as a $1 hold on what’s ultimately a $50 tank of gas. But if you have a lot of those, it’s not much different from checks.
You Can Hide Money From Yourself
When I was in college, my mom taught me to subtract a specific sum of money, such as $100, from my register to ensure I didn’t spend it, either as savings or a cushion in case my math was ever off in my check register. Of course, some modern accounts can do something similar for you, or you could always just never spend your account below a specific amount.
Reasons NOT to Balance Your Checkbook
The biggest reason not to balance your checkbook is because there are easier ways to do almost all the things balancing your checkbook does. Some may depend on having a checking account from this century. But if you don’t, there are plenty of online banks you can rely on.
As long as you have one of those and don’t use paper checks, there are plenty of really good reasons to skip balancing your checkbook.
If you have a lot of transactions, it can take an hour or two to audit them. Answer honestly. Have you ever discovered anything while balancing your checkbook that made it worth that kinda time — something you couldn’t have discovered some other, less complicated way thanks to modern technology?
I stopped balancing my checkbook because it just stressed me out over something I ultimately realized just wasn’t that big a deal. I’d spend a couple of hours reconciling my checkbook only to be off by three cents over a silly math error from the fourth transaction of the month that necessitated redoing all my math, which I’d inevitably done in pen because that’s what one writes checks with, so everything was overwritten and hard to read.
Should I really be stressing about three cents in an era when my bank account does all the heavy lifting, anyway? What’s the definition of insanity, again?
If You Don’t Write Paper Checks, You Already Know About How Much You Can Spend
So long as you don’t write paper checks, your bank account balance is about as accurate as it can get. You don’t have to worry about forgotten transactions or bad math.
It even accounts for pending e-checks. There may be slight inconsistencies due to preauthorizations, but they’re usually minor and probably only last a couple of days. And if you never spend your bank balance down below a specified amount, like $100, you typically don’t have to worry about those, either.
If you still have a rent check, you might have to account for that. But otherwise, it’s pretty straightforward. And if you absolutely have to send a rent check because the property owner won’t accept anything else, see if your bank can do that for you.
For example, with Wells Fargo, I can send a real paper check straight from my online account. It still takes up to five days to reach its destination, but it shows up in my bank account immediately.
Your Bank Catches Fraud & Vendor Errors Faster
Your bank can notify you instantly of any kind of transaction. If you pay attention to those, you’ll catch vendor errors, potentially within minutes of the transaction, and stop fraudsters and thieves pretty quickly too. Does it really sound like a good idea to look for that stuff once per month?
Moreover, in some circumstances (what types may depend on your state), there are laws that require them to look out for suspicious transactions and reimburse you for fraud. If the bank’s got skin in the game, it’s likely to inform you of anything it thinks is suspect ASAP. Perhaps even to a fault.
It hasn’t happened in a while, probably thanks to more sophisticated security algorithms, but back in the day, the bank would lock my account at the beginning of the month like clockwork. My two biggest bills, rent and electricity, were due on the 1st and 2nd of the month, and that was “unusual spending” compared to the rest of the month.
After six months of them promising they would make a note on my account and never do it again, I finally called my electricity supplier and begged to swap my due date.
You Can Use Technology to Learn of Bank Fees Sooner
Most banks let you sign up to receive emails, texts, or push notifications any time you incur an overdraft or returned deposit fee. And if you have to pay monthly or annual fees to have a bank account, you can check for those pretty easily too.
In fact, your check register can steer you wrong if you forget to account for fees in your balance. And if you’re using a check register, you’re probably not checking online often enough.
You Can Already Track Automatic Payments in Real Time
Are you sensing a trend yet? You can get push notifications, texts, or emails about automatic payments from subscription services and utilities, either from the bank as a transaction notification or directly from the merchant (or both).
Your Bank May Have Built-in Budgeting Features
Many online bank accounts have budgeting features you can use, but they don’t always play well with a paper check register. For example, they may allow you to save money for specific goals by putting your money into “buckets” or “pockets.” But they’re all really in the same account.
Even if your bank account doesn’t, third-party apps like Mint have similar features. And those may have additional features that make hanging onto a paper check register and the required balancing it brings seem less than desirable.
Should You Balance Your Checkbook?
If you use paper checks, using a check register and balancing your checkbook is a must. By law, people have up to six months (180 days) to cash a paper check — yes, even if the check says “void after 90 days.” So they can come back to bite you if you don’t balance.
Until it goes through the system, your check register may be the only record of the transaction. But if you make errors and don’t reconcile them, you could cause a lot of problems down the line as errors pile up.
That said, if you only write one or two checks per month and those checks are specific ones for the same amount each month, such as rent, you can probably get away without it. It’s easy enough to remember the amounts of a couple of checks you write every month and mentally debit those from any total you can see online.
But if you’re not going to balance, you have to be disciplined about not using checks for anything else. Forgetting about a birthday check or paying back your pal for dinner can overdraw you if they take a couple of weeks to cash it and you forget. Frankly, so can your rent check if you forget to account for it.
But if you don’t use checks at all, you should be in the clear. That doesn’t mean you can’t keep a check register and balance your checkbook if that’s what you want to do. It also doesn’t mean it’s not a better idea for you to keep one based on your own temperament. But there are ways around it.
What to Do Instead of Balancing Your Bank Account
Pop quiz: Do you recall the purpose of balancing your checkbook in the first place? Thinking of the purposes and how your online bank account works, you can clearly see that most of those goals are moot these days.
- The bank rarely makes errors, anyway.
- If you’re not recording transactions, you didn’t make any entry or calculation errors. And your bank probably didn’t either.
- If you’re not writing checks, your bank can usually tell you how much you have available to spend at all times.
So the primary reason to “balance” anything in the era of online banking is to ensure there are no unauthorized or incorrect transactions.
And you can do that without sitting down to do a bunch of math. Just check in with your account periodically and follow a few simple steps to ensure nothing falls through the cracks.
1. Keep Every Receipt
Rather than write down every transaction, just keep every receipt, including receipts for debit transactions and deposits or ATM withdrawals.
If you have a couple of regular checks, it can be helpful to order the ones that come with carbon copies instead of check registers. Those carbon copies can serve as your receipts for those.
I learned to keep receipts as a habit while I was freelancing, though I’d be lying if I said I was as consistent as I should have been.
For motivation, I downloaded a receipt-scanning app that pays you to shop. You can scan them as you go through them and earn gift cards for shopping. I like Fetch because you don’t have to preselect offers, but Ibotta is also popular. The sweet, sweet Amazon gift cards I earn keep me motivated to save receipts.
It’s best if you have a specific place to keep them. I’ve used a couple of hardcopy methods. I started with the cash pocket in my wallet but moved to a specific location in my house where I can just drop them as I come in. Both worked fine. It’s just a matter of what you’ll do consistently.
You can also snap a pic with your phone and trash the hardcopy. You can use a dedicated (usually paid) receipt-management app like Quickbooks or Fyle or just your phone’s camera app. I also always take advantage of it when businesses offer to email the receipt.
If you need them for the IRS too, a dedicated app might be better. They have organizational tools and methods to ensure you meet the IRS’s requirements for e-copies of receipts. I don’t trust myself to do that every time, but if you will, it’s obviously a superior method.
I also used to keep a pen and notepad in my purse (I recently transitioned to the Notes app in my phone — we’ll see how that goes) to write down anything specific I needed to check in on. For example, I can jot down a note and put it with my receipts if a vendor swipes my card twice to remind myself to check that they didn’t actually get paid twice.
2. Sign Up for Push Notifications or Texts
You can have your bank notify you via your smartphone of different transaction types and fees, depending on your personal preferences. If you sign up to be notified of all debits and fees, you can see instantly if something you didn’t authorize comes through. That’s especially handy if you notice before you even leave the store.
And if you’re good at paying attention to those and acting on them when you see them (such as checking bill amounts for utilities), you might be able to stop here.
3. Check Your Bills
If you’re not writing checks, your bills are getting paid somehow. Even if it’s through online bill pay, you want to double check the accounts themselves to ensure the amounts are right.
It helps to have a list of all your bills, the day they pay out, and in what amount if they’re set charges like a streaming service. Ideally, you’d check the ones with varying amounts, like water and electricity, the week before they pay out to ensure you agree with the amount and the week they pay out to confirm the amount.
But who are we kidding? Neither of us is going to do that. So just check that the bill comes out in the right amount and that it doesn’t run twice or something, which happened with my (and everyone else in the city’s) water bill once.
You’re also looking to ensure they do come out. I was able to catch an important subscription lapse before it was too late because I noticed it didn’t come out as expected. My debit card had recently expired and I hadn’t updated it yet.
4. Compare Your Transactions
Go through your online checking account comparing the transactions you see there to any receipts as needed. This check-in doesn’t entail all the math or work of balancing. You don’t have to write anything down as you go on with your life, and you don’t have to ensure your totals match your bank’s to the cent.
It’s helpful to go all the way back to a couple of days before the last date you checked unless you do it daily. For example, if you check your account on Saturdays, go back to the previous Thursday to see if any new transactions came in.
That helps catch any transactions that lagged behind the last time. You see that with electronic transactions that use the ACH network (like e-checks) or certain types of debit card transactions, such as preauthorizations.
For example, my DoorDash and some gas station transactions usually take 24 to 48 hours to get out of pending. I can see them there, and I can’t spend the money, but it may take time for them to finalize.
From there, go one transaction at a time. If you see any you don’t recognize or question the amounts of, you can check the receipts. When you’re done, dispose of any receipts as necessary.
For example, receipts I need for taxes or proof of purchase I keep, and the rest go into the garbage. At least they’re supposed to. (Repeat after me: I do not need to keep that two-week-old Chipotle receipt unless it’s a business expense or I’m suing them for food poisoning.)
5. Research (Only) Suspicious Transactions
If you come across any transactions you don’t have a receipt for and don’t remember, research them as necessary. For me, those are usually online transactions, most commonly Amazon or DoorDash. I can check the amounts against receipts in my email or my Amazon or DoorDash account if necessary.
If you remember them, there’s probably no need to research them. If the amounts were wrong, you’d have noticed when you checked out, right? If not, you should definitely pay more attention. Those things are easier to correct at the time. And remember what we said about bank errors being rare? If there’s a discrepancy, trust the bank until you’re sure it wasn’t someone else.
If you come across one you failed to keep the receipt for, your course of action depends on the transaction. If you remember it or don’t think it’s suspicious, move on. You’ve got things to do, cha-cha. If it’s suspicious, you need to look into it.
Most suspicious transactions I’ve ever come across have been things I later managed to associate with a receipt or at least remembered making once I understood what it was. Things like, “GO RAIBH MAITH AGAT MATHAIR…” Just kidding. That’s Gaelic for, “Thank you, Mother.” But the fact that you knew what I meant makes the point.
If you have any checks going out anytime soon, now’s the time to mentally delete that amount from your checking account until it really comes through.
I think it’s best to do this weekly, though you can set your own schedule. The reason you balanced monthly in the past is because that’s when the bank sent paper statements. Now, you can access your account info anytime you like from a computer or smartphone. You could do it daily if you wanted.
If you still write checks frequently, balancing your checkbook simply has to continue being part of your life. If you hate that part of the month as much as I did, that should be enough motivation to kick your checkbook to the curb.
But I’m starting to realize I just kept doing it because everyone said I should without thinking about whether it was serving any kind of purpose. For me, it’s just not. There are other ways to track the things I need to track that work better for me.
But if balancing works for you, even if it’s just for peace of mind, and it doesn’t bother you to do it, by all means, you do you.