A running balance is the total amount of available funds in a credit or debit account. A running balance can also refer to a running tab that you’d open at a bar. It can also refer to the amount of money you have in a savings or checking account or even an investment. So the term running balance is very broad in scope.
Keeping track of your running balances is very important. In the case of a checking account it’s important to know how much money you have available so you don’t get into trouble with overdraft fees. With online banking it’s easier than ever to stay on top of your checking account balance on a daily basis.
Knowing your running balance for credit is also important because your credit can determine what items you can put on your card. It’s also important to keep track of how much debt you’re under so you don’t get into trouble on that front.
A tab opened at a bar is a sort of credit you have. You can put drinks and food on your tab and you’re expected to close out your tab either at the end of the night or end of the week depending on your relationship with the bar. Most tabs these days can be opened using a credit card and anything you place on your tab for the night will be charged to your card at the end of the night.
Keeping accurate records is the best way to stay on top of your running balance. You can keep track of your running balances using most accounting or spreadsheet software. Knowing your running balance will help you keep track of your cash to debt ratio and make sure you’re not accumulating too much debt.