4 Reasons Reconciling Your Checking Account Is a Good Idea

Regularly reconciling your checking account statements is key whether you’re looking to verify transactions, track your spending, create a workable budget or keep an eye out for fraudulent charges.

Other advantages of taking the time to carefully look over your account statements include potentially avoiding bank overdraft fees and late fees on bills and improving your financial insights so that you can make the most of your money.

Let’s learn more about the benefits of assessing your monthly checking account statements.

Confirm your transactions are correct

The primary purpose of reconciling your checking account is to verify that the correct amounts of money are being withdrawn from and deposited into your account.

Whether you are using your checking account and a linked debit card to pay bills, make daily purchases or move funds between accounts, it’s important to know that your monthly bank statement and your personal records and receipts match up.

You can also check that you’re receiving any money you’re owed, such as a biweekly paycheck from your employer or other regular deposits. Banks and vendors can occasionally make errors, so it’s helpful to confirm there aren’t any irregularities, duplicate entries or wrong amounts.

Look out for fraud

Regularly reviewing your checking account statements is a helpful way to catch fraudulent activity.

If you do notice an error or suspected fraud, take action and report your findings to your financial institution right away. Issues like this are more likely to be solved the sooner they are reported.

You could also track your account activity online or on your financial institution’s mobile app in order to spot incorrect charges and instances of fraud before they cause any significant damage. It could also be helpful to set up alerts to let you know when suspect transactions occur. Most banks can alert you to questionable charges through email, text or phone calls.

Track your spending habits

Another benefit of reviewing your checking account at least once a month, if not more frequently, is tracking how you spend your money. This step can help you gain more awareness of your overall financial habits.

If you’re wondering how much you spend at the coffee shop every week or how much you’ll save by cutting down on meal delivery costs, analyzing your checking account and monthly statements should be your first step. Additionally, look out for any recurring overdraft or maintenance fees from your financial institution. It can be easy to forget about these charges, but they will show up on your monthly statements if you missed seeing them online or on your bank’s mobile app.

Create a budget

Keeping a close eye on your checking account and tracking where your money is going can help you create a more accurate monthly budget.

Setting a budget or estimating how much you can afford to spend each month might help you make progress towards your financial goals, set aside money for savings and ensure you have funds available for a rainy day. You can’t create an accurate budget for the future without knowing where your finances currently stand, which makes it all the more important to regularly review your checking account.

Make time to review your checking account

Setting aside dedicated time to reconcile your checking account every month is a great way to confirm transactions, look out for fraud, track your spending habits and create a budget that works best for you. This simple step can set you up for a brighter financial future.

Disclaimer: Article content is intended for information only. It may not reflect the publisher nor employees’ views. Consult a financial professional before making financial decisions. Publishers or platforms may be compensated for access to third party websites.

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