Nina Smith

Happiness is a Balanced Checkbook

Filed By Nina Smith | December 10, 2007 7:17 PM | comments

Filed in: Living
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“If you want to live a happy life, tie it to a goal, not to people or things.” – Albert Einstein

I balance my checkbook every month. According to Moebs Services, an economic research firm, I’m the minority. They have research showing 87% of consumers don’t reconcile their checking accounts.

Why do people need to know how much is in their bank accounts? After all, isn’t that one of the wonderful things about online banking? Being able to log in to your account and see how much is or isn’t there.

But even in this age of immediate electronic access, Jean Chatzky at MoneySmart gives high marks to the “balance your checkbook” habit. She provides Five Financial Habits that Can Make You Happier and reconciling your checking account tops the list. She writes:

It may seem like quaint advice, but it’s not. My research shows that people who balance their checkbooks monthly are happier — perhaps because they don’t worry that the next check they write will bounce. Or maybe seeing that figure on the bottom line curbs the impulse to spend.

Awhile back, Kathryn at Recovering Straight Girl disagreed. She writes:

I don’t actually balance my checkbook. I really don’t see a need for it, I rarely write checks, and everything is right there on-line for me to review as needed. I pay my bills on-line and I always have cash due to my Glamorous Waitressing Job.

The online method seems to work for her. She’s happy. On her About Page she says:

I am in a committed relationship with the most wonderful woman on the planet whom I am spending the rest of my life with. Her name is RMWHG, (Rock My World Hottie Girlfriend,) or HG (Hottie Girlfriend,) for short.

It’s hard to argue with the rock-my-world-hottie-girlfriend kind of happiness. But their relationship is still young and fresh and I can almost guarantee they haven’t merged finances.

A web site called Tomorrow’s Money from The Bond Market Foundation discusses the added challenge when two people are using the same checking account. They suggest:

One of the most common difficulties, and frustrations, in balancing a checkbook can be not having withdrawals listed, particularly ATM and debit card withdrawals. That can be doubly difficult if two people are accessing money from the same account. Try dedicating a space (an envelope, a file folder or a drawer) where you put your ATM statements, receipts, etc. Then make sure you enter them into your checkbook.

They also say that balancing your checkbook is important for several reasons:

1. It gives you a feeling of financial control 2. It helps ensure that you don’t bounce checks and incur overdraft and bounced check fees 3. It gives you an accurate picture of your accounts 4. It can show you where you’re spending money

So if there are so many good and happy reasons to balance your checkbook, then why aren’t more people doing it? Is it possible that some people never learned this basic skill? Kids can graduate from high school without knowing how to read, so it’s possible that some young adults were never taught how to balance a checkbook.

If you need the basics then here is a step-by-step tutorial and a PDF document that shows a check register and provides a handy exercise at the end to help someone learn. Obviously, it’s easier if you use a calculator. Thank me later.

In the meantime, Jeffrey Strain at Personal Finance Advice gives his tough love and no nonsense advice by warning:

If you don’t know how much money is in your account, you’re much more likely to bounce a check or incur some other type of bank fee. Many people assume that they can rely on their ATM receipts to keep track of their checking balance, but these do not show outstanding checks. They may also not show debit card transactions which can lead a person to think there is more money in the account than there truly is.

He also continues on with how to get started when you’ve never done it before:

The first step to rectifying this situation is to take a look at your checkbook and see how long it has been since you last balanced it. Once you have determined that, you have one of three choices:

1. Balance the checkbook.

2. Take the banks word on your current balance and write the balance from your last statement you received as a starting point. If you have cashed checks or made ATM or debit card transactions since then, balance the checkbook with those transactions included.

3. If your checking account is in such a state that you don’t know where to start, then begin keeping track of everything from today and just forget about everything previously. When your next checking statement arrives, you can balance everything from that.

So get started my little math wizards and enjoy the added happiness!

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Nina blogs about money over at Queercents.


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We do it a little differently - we use our computer.

We use Quicken as our checkbook. It's installed on Jerame's computer and he's "in charge" of it. We put all of our receipts in a drawer next to his computer and every so often one of us will stop and put all of them into the register. The program allows you to reconcile the checkbook easily - you just check the box next to the entry if it's on your bank statement.

Since we use checks so infrequently, it's a good system for us. (We also keep a piece of paper with check numbers and amounts on it if we've written a check.) Once a month when we pay the bills, we also reconcile the checkbook.

The good part is that we can easily see how much we're spending on whatever we want. Eating out, for example, takes up a huge amount of our budget. We've been working on that lately to try and increase our on-hand money.

Good advice, Nina.

I'm like Bil, I use my comp to keep track of my accounts. It makes sense because I'm always here but I can rarely find a pen in my apartment.

Also, it helps with all those electronic transfers... I haven't written an actual paper check in ages.