A balance is the amount of money in a bank account or an amount of money owed to a lender.

When discussing checking accounts, savings, and investments, a balance relates to the amount of money available for use. In contrast, when referring to debts and bills, balances refer to the amount of money owed to third-party institutions and lenders.

Keep reading for more information on these different balance types, how they can work, and how to manage them!

Balances Within Checking, Savings, and Investments

Monitoring your balances with your checking, savings, and investments is integral to tracking your income, expenses, saving goals, and investment returns. Your balances in these accounts will give you an idea of how much money you have to spend, save, or transfer between accounts.

Your Checking Account

Keeping track of how much money you have in a checking account is crucial to avoid fees with negative balances (learn more about overdraft fees). Negative balance fees can create a cycle of playing catch up which can be stressful and expensive.

One way to keep track of a checking account is to have automatic updates sent to you based on certain conditions. For example, many banks have alert preferences for thresholds like a minimum balance or minimum transfer amount. No matter how you keep track of these bank balances, make sure to check on them regularly—especially if you have automatic bills and payments set up!

Also, keep in mind that pending charges or a Pending direct deposit can take a little while to show up, so factor those in when browsing through account balance.

Savings and Investments

When it comes to savings and investment balances, it will be helpful to keep track of the overall amount, any interest, growth, losses, or return. This monitoring can help you determine whether better-suited options exist to store your savings or investments.

Balances With Debt and Bills

Balance when referring to debt is essentially the opposite of bank balances; instead of having money to spend, a balance with a third party will mean that you owe money to them. You’ll find these kinds of account balances with credit cards, personal loans, cash advance loans,  mortgage companies, utility providers, cell service providers, car dealerships, etc. Or with any other types of lenders or third-party creditors, you work with.

Account Balances With Credit Cards and Loans

When you take out a loan or credit card, your total balances will reflect the amount you have borrowed or credit you have available to borrow and interest. You will see the balances go down after you start making payments towards these loans and debts. Once you completely pay off your loan or credit card, your account balance will be zero. When it comes to your statement balance vs. current balance, a statement balance is the debt accumulated within a given billing period and the current balance is what you owe on the account overall.

You will have to apply for another loan to borrow money again for personal loans. In comparison, credit cards are revolving credit accounts, meaning you can borrow from them if you have any remaining credit left.

Because credit cards are revolving credit, you need to pay attention to the amount of remaining credit you have, in addition to your credit card balance. The balance amount for a credit card will be subject to interest charges every month, one reason why credit card debt can be so hard to get out of. And so, before using them, learn techniques to manage credit cards wisely.

Balances With Bills and Monthly Payments

The convenient thing about bills like your phone bill, subscriptions services, and utility bills is that there is no interest involved like there is for debt. Most of these bills are monthly payments, and the balance you will see will be what is due for the month. However, suppose you missed earlier payments or are making late payments. In that case, the servicer will add those missed payments to your current account balance. You should receive a statement for all your bills in the mail or online.

Why Keep Track of All Your Balances Is An Important Part of Managing Finances

Keeping track of your balances of net worth accounts (checking, savings, and investments) along with your debt accounts (bills and debts) are integral to knowing your spending power, expenses, and debt-to-income ratio. Here are a few things that balance tracking can help you accomplish:

  • Starting or modifying a budget
  • Improving your credit score
  • Planning for retirement
  • Optimizing the way that your money works for you
  • Significant financial goals like purchasing a home
  • It can help you find the most cost-effective and efficient solution for debt payment, savings, and more.
  • Visualize, condense, or split up join-debt


Balance, in finances, will generally mean the amount of money you have in an account or the amount you owe to a third-party account. Keeping track of all your account balances and knowing what they mean is an essential part of financial literacy. It can help you set goals with your money

Quick And Easy Personal Loans Up To $2500*