Both my current accounts have budgeting apps built into online banking - I used them for a while out of curiosity, but don’t pay them much regard anymore.
Another European here who doesn’t understand what people mean when they say they’re “balancing an account”. I know how checks work, even if they’re not a thing in Europe, as has been said before; I used to live in the UK for two years and had a checkbook (or rather chequebook!) there, where they seemed to be more of a thing than on the continent. However, I have no clue what is meant by “balancing a checking account” is supposed to mean. Surely the amounts of the checks you’ve written are simply debited to your account? What’s there left to do for the account holder?
Fundamentally, it means keeping your own independent running total of the funds in your account, which will be more up to date than what the bank says, then occasionally going back and reconciling this against what does post to your bank account. This can still be useful now, but it was much more important when money moved even more slowly. Checks were used for more things, they had to be physically shuttled around the country, and you only really found out what had been happening to your bank account when you got your monthly statement.
Even when I used to try and reconcile the checking account it never balanced out. It was always off by a few cents or dollars.
Now the bank keeps track and monthly statements are a thing of the way past.
Ab, I see. So essentially it means keeping track of checks that you wrote or cashed but which haven’t settled yet. Makes sense, thanks.
This. And yes, I do this. In college and grad school I was writing paper checks in the classic tiny ledger, but for the past 20+ years my ledger has been an Excel spreadsheet. I pre-enter known upcoming transactions (mortgage, paychecks) and reasonable estimates for major transactions (monthly credit card bills, etc.), and this lets me forecast my account balance into the future. I check my spreadsheet against the bank’s online records maybe once every month or two.
Once a month I update a spreadsheet with the values from my bank, investment, and pension accounts. I cut&paste the values from my credit card statement to a spreadsheet. At the end of the year I download all the debit card transactions to a spreadsheet, combine that with the credit card data and assign categories to each transaction. Since the pandemic I rarely use cash so now I get a more accurate idea of what I’ve been spending at the pub. It’s a bit scary.
It’s called a “checking account” but it doesn’t have to involve cheques. I write maybe 1 cheque per year, and I still reconcile everything every Saturday morning. The whole update takes maybe an hour, using Quicken and FreeOffice Calc, and it’s one of the highlights of my week.
Did the mortgage or property tax payment go through as expected ? Is my pay the same as last week ? Did a new invoice come in (paper or electronic) for which I need to schedule payment ? Is it the time of the month when a certain credit card should be issuing a bill, even if they forgot to send an email about it ? Do I have extra cash that I can transfer to savings or investment accounts ? How are my investments doing this week ? (Arguably, that last one is somewhat toxic, but my pension fund doesn’t list historical prices, so if I miss it the graph will look too smooth. 
)
Yes, I work for a global company that sends a lot of European employees to the US for short, medium and long term assignments.
One of the aspects of American life they always flabbergasts them is that our banking system seems antiquated, slow and expensive. People from Western and Central Europe in their 30s and even early 50s have probably never written a paper check, and in fact never received one either.
I used to balance it with every statement and updated my version of it more often than that, using software. But I stopped about a year or two ago. It was a lot of work and I almost never found anything they had wrong. The only time I did, it was a string of fraudulent charges that went on for 8 months and caused valid checks to bounce, with new account numbers and new debit cards issued multiple times, until I finally just had to stop doing business with that bank.
The one thing I used the software for that now wouldn’t work is generating data including my categorization choices, which I then ported into my own computer program for predicting how retirement would look. I do wish I had those data available right now as I consider a new step from a 4 day work week to a 3 day, and consider beginning to draw on retirement savings. But I doubt it’s worth all the effort.
As an American who moved to Europe a few years ago, I’ll underline this. Americans might as well be weighing chickens against bags of grain in the public square.
I used to balance it every single month and would be stressed out if it didn’t come out to the penny. I haven’t done it now for years and I’m much happier. I don’t write many checks anymore, I use my debit card for shopping and most bills are automatic withdrawals. Every once in a while, I look at my account online.
^ This.
With all the ways to move money in and out these days, and being able to view things on line whenever I want, I didn’t see a point to me doing a separate bookkeeping.
I do have customers that carefully note every form of transaction in their check ledgers at check out, but they’re uniformly older folks. And hey, more power to them if that’s how they want to do things.
Same here, and i used to write a ton of checks.
Last week, I had to write two checks (to pay a couple of doctor bills, from smaller practices which still don’t do online payments). Doing so used up the last 2 checks in that particular checkbook, so I had to pull it out of the checkbook holder, and replace it with the next checkbook from the box.
I’ve always used check books which have a carbon-paper copy for each check, and when I looked at the just-completed book, I noticed that the first check in that book of 20* was written in 2018 – it took me four years to write 20 checks.
Like others here, I now take a look at my account activity online once or twice a week, to make sure that everything looks right.
*- For decades, the checks that I bought were 25 to a book; at some point, a decade or so ago, the check-printing company that I use changed over to 20 per book.
I don’t keep a running balance, but once a month I sit down to “look at my money” and pay bills using Quicken. I reconcile my checking account and credit card account. Reconcile is nearly the same as balancing, it’s just done after you get your statement.
I reconcile my business accounts every month in Quickbooks too.
My dad is obsessed with balancing and reconciling, and does it all on paper. He instilled this in me, even though I don’t balance using my check ledger anymore (like everyone else, I only write like 5 checks a year).
We enter our transactions both in Quicken and in the check book, but I only balance it in Quicken. I’ll enter stuff in the check book I forgot when the statement is available, but going back and correcting things on paper is a real pain. In Quicken fixing typos is easy.
We only write at most 2 or 3 real checks a month, the rest is online deposits and bill pay, with debit only used for Costco.
We have an ancient version of Quicken which is good enough, and don’t download transactions because it is better to keep on top of things. My wife does the entries since it is on her computer, and I do the balancing. With so few transactions it just takes a few minutes at most.
I used to balance my checkbook religiously and got frustrated with it because it was never accurate according to what the bank actually had. Worse, I ended up with some overdraft fees.
Now, I rely heavily on the mobile app.
To our European friends that don’t understand balancing a checkbook, this Youtube video demonstrates the technique that most of us (I think) were taught. And yes, it’s a pain. That’s why I don’t do it anymore.
It’s not necessarily just checks - people who do still balance their checkbooks will also record any debit transactions and automatic bill payments. Part of the reason for balancing is to find errors but mostly it’s to know how much you have available in the account once you have accounted for all outstanding transactions including checks, scheduled payments, debits that haven’t hit the bank yet and so on. There’s a difference between what the bank knows and what I know- the balance on my bank’s website might say $1000, but if I know that I have bill payments in the amount of $800 scheduled , I really only have $200 available to be withdrawn.
I don’t bother balancing my checkbook because due to my financial circumstances I don’t need to - but if I were in situation where my scheduled mortgage payment on 4/13 might drop my balance to $50, I would be entering that mortgage payment in my register and subtracting it from my available balance a few days in advance (probably on the date of the most recent deposit). Otherwise, I might withdraw $100 on 4/12 and not have enough to cover the mortgage payment on 4/13.
20+ years ago I used to stay in Bavaria for a week here, a week there. One thing I had to get used to was how many places would not accept plastic, only cash. So, this has turned around, it sounds like.