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Why I Don’t Balance My Checkbook

Checkbook Account

We have been told that we need to balance our checkbooks for decades. This common advice is given with the best intentions. We are told that by tracking our transactions, we are protecting ourselves from overdrafts and ensuring nothing unauthorized happens in our accounts. That is true, but there are better ways to do all of that.

Automated Tracking Options

I know what my account balances are within about $10 at any given time. That is not because I log into my bank’s website. You can log into one site to get everything in front of you in one executive management style view.

Of course, regular readers know I am talking about Mint.com. With one login I see all of my account balances in one, easy to use view. If that site doesn’t float your boat, also check out my comparison reviews of Mint.com vs PageOnce or one of my new favorites, Personal Capital.

How to Use Them

While sites like PageOnce offer you a quick snapshot of account balances, Mint and Personal Capital give you a far more in depth and useful view.

Every day when I log into one of those sites (I use both Mint and Adaptu, but I am a finance nerd), I do two things. First, I look at my account balances. Second, I look at every transaction from the last few days to make sure I recognize everything.

It really is that simple. It takes about 15-30 seconds per day. That is less than five minutes a week. Balancing a checkbook the old fashioned way takes a lot of time and effort. However, if you track your transactions online and know your balances, you don’t need to waste the headache on balancing a checkbook.

What About Overdrafts?

Let’s say you are not good at remembering your account balances. Maybe you are not as money minded as your typical finance blogger. That’s okay. You shouldn’t be spending money out of your checking account anyway.

I put 100% of all money I spend on my credit card. My primary card is a Starwood Amex and my backup is a British Airways Visa. They each have a credit limit over $10,000. There is no way I would ever, ever, ever go over that limit. For those of you without high limit cards, just keep focusing on building your credit for a few years and you will get there. Most banks would still give you a limit far beyond what you need.

If you put everything on a credit card, you are doing yourself a few favors. First, you get rewards, which are awesome. Second, you are protecting yourself from fraud. Third, you are able to match your income to your expenses and avoid the risk of overdrafting your checking account.

Can I Still Track Transactions?

If you don’t trust yourself or your waiter to ensure your transactions are correct, I have a method for you to ensure you don’t mess up and miss something.

Every time you spend money, keep the receipt. When the transaction comes through on your Mint account, throw the receipt into a storage drawer or paperclip them together in a stack for the month. At the end of the month when your statement comes, do a quick reconciliation and mark them off as you go. This takes a little more work, but is a more thorough way to make sure nothing extra comes through.

How Do You Track Everything?

If you have not given it a try already, I really do suggest you give Mint.com or Personal Capital. I think they work great. If you don’t, however, how do you track your transactions? Please share your strategy in the comments.

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