Money Matters: Why You Should Always Balance Your Checkbook in 2021 |
Does anyone still use paper checks? According to 2019 Federal Reserve Payments Study, Yes.
But check payments made up just 8.3% of basic non-cash payments in 2018. Writing checks and balancing a checkbook are becoming a thing of the past, and digital wallets, mobile banking and financial apps are taking over.
But the skill of balancing a checkbook is still very relevant. Today we could more accurately call it the reconciliation of your bank account. Balancing your checkbook or reconciling your bank account is one way to compare your bank statements with your transaction statement and make sure they match.
How to reconcile your accounts
Reconciling your bank account is simple and only takes a few minutes.
View your most recent bank statement, credit card statement, and records of your transactions for that month – receipts, paychecks, payment confirmations, and more.
Compare each transaction with its record on your statements to make sure they match. Look for duplicates or anything missing on the bank statement.
Make sure you know the dates you are supposed to be paid and the dates of your automatic bill withdrawals, if any. Make sure these deposits and withdrawals appear on the dates you expect. If a withdrawal or deposit was scheduled on a recent holiday or weekend, it may still be pending.
You probably won’t notice any deviations, but if you do, contact your bank or provider to correct the error.
Reconciling accounts is a good exercise to do every month and it helps you spot errors, stop fraud, and build better budgets.
1. Find the errors.
Bank staff do their best to be precise, but sometimes mistakes do happen. For example, a bank accidentally deposited $ 37 million in a Texas woman’s account due to a clerical error. The woman caught the mistake when she once verified her account. You probably won’t find millions of extra dollars in your bank account, but while such big mistakes can happen, smaller mistakes can happen as well.
The same goes for traders. Suppose you are going to buy a pair of shoes and the merchant accidentally charges you twice. If you never reconcile your accounts, you might never notice the extra $ 42 you were charged. But if you reconcile your accounts every month, you’ll catch such mistakes before it’s too late.
2. Stop fraud.
Unfortunately, credit card fraud is all too common, with losses due to fraud expected to be as high as $ 35.67 billion in 2023. The good news is, if you notice a fraudulent debit on your account when you reconcile, you can take steps to rectify the situation.
Contact your bank to report the unauthorized debit. According to Federal Trade Commission, if “your card is not lost, you are not responsible for these transactions if you report them within 60 days of sending your statement.”
Contact the seller to dispute the charge.
File a fraud or police report, or file a Identity theft report with the Federal Trade Commission.
Transfer all automatic payments to your new account or card.
3. Make better budgets and save money.
One of the main benefits of regular reconciliation of your accounts is that it just helps you be more aware of what’s going on with your money. These days, with automatic payments and conveniences like digital wallets, it can be so easy to let money come and go without really realizing it.
As you finish reconciling your accounts, write down your fixed and variable expenses. According to Bank of America, “You are unlikely to be able to cut (fixed expenses), knowing how much of your monthly income they take can help. And taking a close look at your variable expenses like groceries and entertainment can help you know where you can. reduce.
While balancing a physical checkbook may be a thing of the past, the ability to reconcile your bank account is more important than ever. By doing it regularly, you can spot errors, stop fraud, save money, and even save money.