Why balance a checkbook?

This crazy thought just popped into my head, and I had to write about it. Why do people balance their checkbooks? I know we've all been told to, that balancing your checkbook is the "financially responsible" thing to do, but why do it? It's a big pain in the rear, it takes time that could be used to do other things, and it's a "non-value-added" type of task.

I haven't balanced my checkbook in almost two years. Crazy, huh? Based on that single statement, "I don't balance my checkbook," you'd think that my finances are ready to careen off the edge of a cliff, dragging me down to bankruptcy oblivion. Not so - my wife and I are doing better than ever, especially with our finances. I don't even feel guilty about it - in fact, I haven't bothered to think about balancing that darned checkbook in a long while.

What's my secret? Well, the first thing is that we record our purchases soon after we make them. We save our receipts for a while, and then put them into our budget spreadsheet about once a week. It's a very relaxed affair - no stress at all. Then, once or twice a month, I check our online bank statement and credit card statements for transactions that have happened since the last time I checked. I make sure they've been recorded in the budget spreadsheet, and that there are no unauthorized charges.

That's it. No adding columns of numbers, accounting for discrepancies, or trying to find three cents' difference between bank balance and checkbook balance. I don't really like pulling my hair out, so I'm really glad about not having to do those things.

I understand that what I do may seem like balancing a checkbook, but it's ever so much more simple, relaxed, and time-saving. If you'd like to give it a try, here's what I recommend:

1. A good budgeting system of some sort. I recommend the kind where the transactions are not automatically filled in for you — I really believe that manually entering your transactions makes you more aware of what you're spending.
2. Online bank access and online credit card account access. The easiest way to do what I described above is to do it at your convenience. If you're waiting for your monthly statement so you can do this, then you're doing a whole month of transactions at a time. That's not convenient at all.
3. Pick a time that's convenient for you to do the tasks described above. It can be exactly once a week, or "every so often", as long as you do it when it needs to be done (at least once a month).
4. Don't pick nits. If there's a transaction that you recorded at $17.56, and the bank shows it as $17.65, don't sweat it. There's no way that even calling the bank about a nine-cent discrepency can be worth your time, so don't bother. Record it in your budget as $17.65, and move on.

That should be enough to reduce your checkbook-balancing stress to near zero. Enjoy.