One of the most important things you can do for your financial situation is to make sure that you reconcile your bank accounts every month. Even if you check your accounts regularly, it is still a good idea to take stock of your finances each month, and reconcile your bank accounts to ensure that the “official” record the bank has matches with your records.
If you have some sort of personal finance software, this is usually fairly simple. You can easily enter the applicable dates, and the software will pull up all of the transactions that you entered within those dates. You can go down the list and check them off. If you keep track of things using pen and paper, you can look for the transactions since your last reconciliation, and start there, comparing your records with bank records.
Should You Keep Your Receipts?
I like to keep my receipts until the reconcile is complete each month. That way, if there is discrepancy, I have the receipt to refer to. This is one of the reasons that I get a receipt with all of my debit transactions. I keep my receipts in a file  for the month, and, when the reconciliation is over, I put them in the recycle bin. I just pile them up, so they are usually in order, since I enter my transactions at least twice a week. While it may not be necessary to keep your receipts, it gives me peace of mind, knowing that I have some evidence, just in case I need to resolve an issue.
Other Reasons Reconciling Your Account is Important
Not only will reconciling your account help you make sure that everything lines up as it should, but it also provides you with the chance to really look over where your money has been going. This is important for two main reasons:
- Identifying fraudulent transactions: An in-depth look at your account statement may provide you with the ability to identify fraudulent transactions that you may not notice with a cursory glance spot check of your accounts  online. You can also catch when a store adds a few cents to your bill, as some of the more unscrupulous sometimes do in an attempt to get a little extra money in a way that is virtually undetectable.
- Facing up to your spending: While reconciling your bank account can be great for helping you identify irregularities and inconsistencies in your transactions, it can also be a good way to help you face up to your spending. When you have to go through and acknowledge every single item, it forces you to see exactly where you are spending your money, and where you can make appropriate changes. It’s really an exercise in being honest with yourself.
The account statement you receive from your financial institution, whether it’s for a checking account, savings account or credit card account, is the “official” record of what is happening with your account. It’s important to make sure that it matches what you think is happening with your money. Plus, reconciling your account can help you catch identity fraud, as well as provide you the chance to review your own habits.
(Photo: Philippe Put )