With today’s advances in smartphone technology, almost every bank has its own app allowing us to check our accounts at the simple click of a button. But the fact is, millions of people, especially young adults, are too scared to check their bank account and checks, and would rather remain in denial about their potentially bad finances as opposed to facing them.
However, being constantly in-the-know of how much you have in your account is essential for both saving and taking control of your money. After all, if you don’t know how much money you actually have, how are you going to manage it? Keeping on top of your finances doesn’t have to be tough or scary, and it will definitely benefit you in the long-run. So, if you’re ready to start properly checking and balancing your account, here are some top tips to get you underway!
In simple terms, balancing your account is more than simply checking how much money you have – this shows how much money is actually available in your account.
To do this easily and accurately, simply identify the beginning balance for your account’s statement period, add your deposits and then subtract all written checks, withdrawals and transactions from this amount. This will then give you an accurate balance, giving you a truly available figure that takes into account checks you’ve written that may not have processed yet.
Many often get balancing and reconciling confused, but it’s vital you know the difference. Reconciling essentially compares your check account records to the bank’s records to identify any differences. If any differences arise, it suggests an unauthorized activity or an error in one of the records.
To reconcile your account, simply calculate all the deposits not yet credited to your balance and subtract all withdrawals and transactions not yet cleared from the subtotal. This will then give you an answer as to whether the bank’s records match your checking account.
With the increase in online banking apps, fewer people are balancing and reconciling their accounts themselves despite the huge benefits they can provide.
Balancing and reconciling gives you the most accurate possible depiction of your finances, helping you budget and manage your money more efficiently. It will also give you a better idea of debt and whether or not your situation will require something like a debt consolidation loan. If this is the case, it’s essential to do some research before you apply to ensure you make the most compatible decision for your checking account.
Keeping track of your money is essential and should never be overlooked. By both balancing and reconciling your account on a monthly basis, you’ll be giving yourself the most in-depth view of your finances which can only be a good thing! From budgeting to overall money management, staying on top of your checking account has many advantageous benefits almost everyone will appreciate and, as long as you’re organized, can be completed quickly without any fuss.