Why I No Longer Balance our Checkbook
For many years, balancing the checkbook was a regular monthly event in our household. Even after we fully migrated our financial record keeping to Quicken in the ’90s, I followed a regimented month-end account reconciliation procedure using paper bank statements.
First, the need for account reconciliation has largely disappeared. Second, not reconciling or balancing the checkbook is part of my goal of simplifying my life, including our financial life.
For us, monthly account balancing and reconciliation accomplished two purposes: (1) validation that all of the transactions posted to our account – and their amounts – were legitimate; and (2) confirmation of our actual account balance. I have found that I can accomplish both of these purposes by at least weekly (and usually daily) online review of our checking account transactions.
Most of our checking account transactions are debit card transactions, electronic payments and direct deposits. These are posted almost instantaneously which means that our memories of the transactions are better. The instantaneous account balance is right there to see, along with any pending transactions that will affect the balance.
Some may question whether I am spending more time with this more frequent monitoring. I don’t think I am. It takes me just a few seconds to connect to our account and a few seconds more to scan our recent transactions and check the balance. Compared to month-end reconciliation, there is no lost memory head scratching trying to figure out what a transaction was for, etc.
There are extra benefits from this more frequent method of account verification. It serves as a form of identity theft monitoring. If a transaction looks strange (hasn’t happened yet), I can check on it immediately. (I also receive instant emails from the bank for any transaction that exceeds $100 and weekly emails with our account balance.)
Also, the account balance is updated in real time. This allows me to move money into and out of the account to maintain our balance near $25,000, which is the cutoff amount for earning Tier 1 interest, currently 2.8%. (I love this rewards checking account.)
Finally, the online banking system allows me to quickly categorize and identify the payee of each transaction so that I can run reports later that summarize what we spent our money on and who received it.
Yet another benefit is that we no longer receive paper statements. This makes it easier for us to travel and move about without worrying about what is in our mailbox and who might want to grab it for illegal purposes.
I’m certain that we are just one of many bank account owners who no longer receive paper statements or “balance the checkbook.” I’m speculating that most of the younger generation never has, period. Baby boomers grew up with no online bank account options so we were forced to go through paper reconciliation.
Have most of you moved away from regular account balancing and reconciliation?
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