A balanced check register illuminates excess spending and avoids overdraft fees that are associated with many checking accounts. Financial institutions charge customers an estimated $17.5 billion a year for overdraft fees, the FDIC Center for Responsible Lending reported in 2007.
Definition of a Check Register
A check register is a personal record of a checking account's activity. It supplies accurate information on the account's balance, debit and credit card transactions, and deposits. The register must remain balanced and up to date to avoid bounced checks, to identify mistakes on the account, and to recognize identity theft.
Purpose of Recording Financial Information
A personal record of the activity in a checking account ensures accuracy in spending available funds or paying bills. Philosophical and emotional problems and strengths are reflected in the use of money, according to Dave Ramsey, host of a personal finance radio program. If a check register is balanced and accurate, it depicts disciplined spending habits and financial understanding.
Proper Use for a Check Register
A balanced check register consists of detailed entries of all transactions in the checking account. Deposits and cash withdrawals must be documented in the register with a balance that is consistently adjusted to avoid insufficient funds. The math involved in keeping and balancing a checkbook is basic addition and subtraction, according to Ramsey.
It's necessary to document all activity in a check register--providing proper amounts and dates of each entry, while adjusting the balance accordingly. The use of a check register requires attention to detail and a constant awareness of spending and contributing funds.
Types of Check Registers
A variety of check registers is available. A check register can be electronic or handwritten. An electronic register requires transactions to be entered manually sometime after the transactions have been paid. A handwritten register provides an immediate update of the account balance, ensuring accurate fund disbursement.
Deciding on a Check Register
A check register is most effective when customized to suit the account holder's needs. Every check register offers different features. It might provide sections for the check number, date, debit and credit card transactions, deposits, balance, withdrawals, automatic transactions, or description of the transaction.
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