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Have you ever thought;
Should I keep a check register?
After all, the beauty of online banking is that at any time, you can see your balance.
Looks can be deceiving. Especially when you are looking at an available bank balance.
Why should you keep a written check register?
Oh let me count the ways!
Before you completely dismiss the idea, take a moment and at least consider the merits below.
Keep a check register to know your true bank balance
Yes, your online banking may show a nice hefty balance that allows you to feel a great sense of security. From that reassuring balance you will need to subtract any automatic payments that will be withdrawn before you get paid as well as any outstanding checks. (More on that later)
It may not feel quite as nice but at least it’s real.
Use a check register to maintain proof of paid bills
Just recently, I balanced my check book. (A weekly task I take care of through online banking).
I distinctly remember scheduling a vehicle payment. It was written in my ledger. However, it had never posted.
How is that possible? Errors happen. I caught it only because I maintain a written check register.
The payment was seventeen days late. Late payments are a serious ding to your credit score and often late fees are incurred.
Make a habit of recording the confirmation number in the check register as proof of payment.
(The truck payment was missing that bit of info which leads me to know the error was all mine.)
In the event the error is on the end of the vendor, you can quickly look at your register to show proof of payment.
Use a check register to track your spending
Every financial guru will tell you that the first step to gaining control of your finances is to track your spending.
There is nothing like the wake-up call of having to write down every penny that came out of your account.
If you pay everything with a credit card and simply use your checking account to pay the credit card bill, may I suggest you keep a register for the credit card? (I can suggest this because I actually adhere to that practice!)
Use a register to ensure checks have cleared
(What is a cleared check? A cleared or canceled check is one that has been presented to your bank for payment.)
Even though most things can be paid electronically, there is a good chance that at some point you will need to write a check.
And do you know how long a check is good for?
A check is good for six months!
That means if you pay someone by check today, they can legally hold that check for 6 months before they present it for payment.
Unless you are some sort of wizard, in just a few weeks you will forget about the check and assume it has cleared the bank.
Recording checks in a ledger and verifying they have been paid can avoid future embarrassment and a dire financial predicament. If a check is presented for payment and there are not enough funds to cover the check, the average fee ranges from 25-37 dollars.
A check can be presented twice for payment and you will incur the fee each time there are not enough funds in the account. (non-sufficient funds as the bank would say.)
Make a habit of verifying that checks have cleared your account.
If the check does not appear in your account as paid, the amount for which you wrote it needs to be subtracted from the available balance.
There are many valid reasons to keep a check register
(Many more if you happen to run a small business through your checking account. But that’s outside the scope of basic.)
My goal was to outline some of the main reasons and hopefully get you started to at least considering adopting the practice.
Keeping a check register does not have to be difficult
I detest the little books that you receive from the bank.
Instead I adopted a copy page size ledger that I keep in my three-ring binder.
The check book register is currently available to subscribers in Lots of (Free) Littles.
I am also making it available as a free download (without subscribing) below.
You can download that right here
The best part of using this type of check register is there is no longer any anxiety concerning how long to retain the check register. At the end of each year, simply scan it in and store it electronically. Easy peasy!
Should you use a check register to monitor your checking account?
That is a most definite YES!
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(It’s a little thing that would mean a lot to me!)