Staying on Top of Your Checking Account

Chances are you have a checking account that you use all the time, depositing paychecks, using a debit/check card, maybe even making automatic payments for regular bills. But when’s the last time you sat down and went over your account to make sure it’s all in working order?

Under the law, every financial institution is required to send you a monthly statement for your checking account. It might be sent by mail, or if you chose the electronic option most financial institutions offer these days, you’ll receive a monthly e-mail notification when your new statement is ready to view online. However you get your statement, it’s important to actually look it over every once in a while.

“While balancing a checkbook may seem like a thing of the past, the principles behind this practice are as valid as ever,” says finance columnist Andrew Freiburghouse. “In addition to preventing overdraft fees and catching erroneous charges, properly reconciling your checkbook can also allow you to take a better look at your financial habits.”

In other words, staying on top of your checking account is about more than making sure your financial institution hasn’t made any mistakes. It will also help you plan and keep a monthly budget. And if simply looking over your statement isn’t enough to give you a firm grip on the ins and outs of your checking account, there are plenty of tools that can help — even a simple spreadsheet can do the trick.

“We have columns for rent, dining, groceries, insurance, etc., with monthly targets,” says business owner and household financer Mandy Minor. “As I input our expenses, they get added up, so we can see in a second if we were over, under or on budget. Each month is a new sheet in the workbook, so it has years’ worth of data that’s easy to get to.”

Keeping a weather eye on your checking account is worth the time, but if you have a nice handle on your budget and are familiar enough with your personal finances, a monthly check-up doesn’t have to take too long.

“If you’re pressed for time, you can get away with examining just the account summary,” says financial adviser Susan Zimmerman. “It’s usually listed at the top of the page and it recaps the state of your account: previous balance, deposits and credits, checks and debits, service charges, interest paid and current balance. At a bare-bones minimum, look over the summary information and see if the figures are in the [ballpark.”]

If a quick scan of your checking account summary shows any discrepancies, delve a little deeper. Be sure to contact your financial institution immediately if you see anything amiss — the sooner you start dealing with any problems, the easier they will be resolved.

So take the first step in financial control and make sure you’re checking in with your checking account regularly. Your savings and investments will thank you.