A Balancing Act: The benefits of monitoring your accounts
Had I realized that balancing my checking and savings account could have saved me almost $100 in overdraft fees, I would have taken the extra few minutes per day to do it. Balancing accounts helps you stay on top of your money. It also helps you keep an eye out for fraudulent charges and errors, and helps prevent making too many transactions without enough money in the account. I learned the hard way.
Before Internet or text banking, mom and dad monitored their savings and checking accounts simply by using a register. They would write down every transaction–whether it was a deposit, cash or check.
Now we have various methods of tracking our account activity including cell phone applications, text notifications and computer programs. On top of that, many financial institutions offer a wide range of services including overdraft protection, online or mobile banking and financial management resources. However, none of this means that you no longer have to keep track of all your transactions. It has made it easier, though.
So here are a few quick steps to balancing an account in the modern era:
- Record the daily opening balance. Use a check register, a cell phone app, a notebook, or whatever else is easily carried with your debit and credit cards.
- Record and date every deposit and withdrawal down to the last cent.
- After every transaction listed, record your new account balance.
By recording all account activity, you’ll know how much money is in an account and be able to spot when transactions are pending (i.e., haven’t been attributed to your account balance). That will help avoid spending what you don’t have, missing an important bill, or getting kicked with overdraft fees (though it is a bit ironic that you’re charged more money for not having enough to cover withdrawals). A detailed register also gives the opportunity to fix any mistakes by merchants or financial institutions.
Maintaining an accurate balance helps to locate errors and prevent identity theft or unauthorized account activity. When accounts are monitored daily, it is easier to identify transactions you didn’t make when comparing your record to the account statement. Mistakes happen, and you want to be protective with your money.
By Melody Moore Copyright 2013 brass Media, Inc.