In today’s technologically advanced world, it might seem as though there is no reason to reconcile account statements. After all, you can get a view of what is happening in your account in real time, whether you just log in, or, more likely, you use an app connected to your bank account to keep track.
While I like to have access to my account online, and I like to see where I’m at, I’m also kind of old school in that I do like to reconcile my account statements once a month. I get help doing it with my personal finance software, but I still go through the process. Here’s why:
I Can Compare My Records to What’s Going On
This is about more than just automatic updates. Reconciling my accounts forces me to sit down and look at what the bank or credit card issuer has in terms of records, and how it compares to what I’ve got. I look at each transaction, and it allows me to reflect on what’s been spent, and make sure that the purchase isn’t fraudulent. It can be easy to just have your eyes skip over something if you aren’t sitting down and really thinking about the situation. I like to reconcile my accounts because it gives me a way to compare notes, and notice when things might be a little off.
Deeper Connection to my Money
Reconciling my account statements also gives me a deeper connection to my money. I am really engaged with my money when I have to sit down an reconcile my statements each month. It’s a great way to consciously see what is going on. When you rely entirely on software to automatically record and update your account, you can see what you have in your account, and you might even get a general report that looks at budget areas. But you aren’t really seeing where each transaction is going. This way, I am far more conscious about what is happening with my money, and I can make changes so that my spending remains in line with my priorities.
A Reason to Plan Ahead
Finally, reconciling my accounts each month gives me a reason to plan ahead for what’s next. This is very important to me, since I want to make sure my money has a purpose. While I don’t budget to the last dollar, I do have a general idea of where I want my money to go, and what I want it to accomplish on my behalf. The time I spend for two hours once a month reconciling my accounts (this includes investment accounts as well), allows me to reflect on the situation and gives me a reason to plan ahead, whether I want to save up for a trip, or whether my asset allocation needs tweaking.
It’s always a good idea to review your finances and touch base with your money. Reconciling my accounts allows me to do that. It’s a little old fashioned, but maybe a little old fashioned is just what your money needs.
I reconcile my accounts monthly as well. It forces me to be grounded in the reality of where my money is going. The automated thing becomes too out of sight out of mind for me. Plus, I just love finances and budgets. I look forward to updating my spreadsheet monthly.
Money is the thing we all deal everyday, but not many of use really can control it and make it grow. The advices given here are good and reasonable. As for me I always try to make a budget and follow it. Also a good tendency is to reduce spending when you can notice definite items you spend too much money on. I also try to make savings, but sometimes I come such financial emergency that my saving account can not cover. In such case I use online loan Canada and solve my problems with no hurt to my budget.