The realization that it's been days or even weeks since the last time the checking account was last reconciled is a common occurrence that strikes fear in the minds of people trying to keep their finances on track. Getting the checkbook register back in line then becomes a daunting and time-consuming task, potentially resulting in the reality that the balance is nowhere near what was expected.
Here are five ways that spending a little time with the checkbook each day can help keep the finances on track, spending in check, and ensure maximum value is extracted from every dollar.
Make Finances a Priority
When the checking account is balanced every single day, it ensures that the family finances are continuously at the forefront of a person's thoughts. Having finances parked firmly a person's short-term memory may prevent the next impulse purchase when walking through the nearby big box retailer.
Available Funds Balance
Even with today's technology, transactions do not always post immediately to an account. Gas station and online purchases or payments are just a few examples of transactions that may not post for up to 48 hours. Checking the balance of a checking account simply through the bank's online portal may not be an accurate representation of how much money is actually available for purchases. By reconciling the checking account every day, the real balance is always known and could prevent an overdraft charge nightmare.
If a person goes through a week without reconciling their checking account, they may not be aware of how much money has really been spent. A trip to the convenience store on Monday, a drive-thru on Tuesday, and a stop at the grocery store to pick up a few things on Wednesday may not seem like a lot of money individually. But their total may be enough to require a budget adjustment for the weekend.
Balancing the checking account daily also provides an opportunity to analyze spending. If fast food restaurant transactions seem to show up frequently, that may cause a person to really think about whether that is a wise use of their hard-earned cash.
For couples that manage their finances jointly, frequent discussion is essential to keeping spending on track. If a joint account is used, daily entering of transactions and evaluation of spending and checking account balance will help keep the family spending in check, and within budget.
Find Bank Errors
Banks are not immune to making mistakes. They have a process to correct their mistakes, but they won't fix a mistake they don't know about. Balancing the checking account daily, and meticulously verifying each and every transaction, can help catch mistakes that could decrease a person's rightful balance.
Reconciling the checking account every day only takes a few minutes, and helps people be in sync with their spending, their partner and the funds they have available. Having that information can go a long way when it comes to being successful in managing the family finances.
Travis Pizel is a personal finance blogger at Enemy Of Debt, where he candidly shares his family's financial experiences, struggles and successes. As a father and husband he provides a unique perspective on balancing debt, finances, and family.