Regarded by many as an
impossible and/or useless activity
carried out by
anal types. Be that as it may;
I do it
every month and am
usually successful.
The point is to verify that you and your bank agree on
how much money you have. Don't forget that they may easily
be wrong. This is how it's done:
- in your ledger, check off all the items found on your
bank statement.
- take the ending balance from your bank statement
- add to that number all your unchecked deposits
- subtract all your unchecked debits (withdrawals,
payments, etc.)
- the resulting number should be the same as the final
balance in your ledger.
If it isn't,
the fun begins. You can try all of these
steps to try to
reconcile the numbers:
- subtract the number you derived [above] from
the final balance in your ledger and see whether you can
find an item (or items) that correspond to that number.
Maybe you duplicated an item in that amount, or didn't
check it off.
- check all of your addition in your ledger
- recheck the figures you used to try to balance
and redo your arithmetic
Well, now you see
why people hate to balance their
checkbook. It involves
a form of detective work that
has a
very limited appeal.
On the upside, if you do it regularly you will know
just how much money you have in the bank (if any) and
you will be able to occasionally catch the bank in
their errors.