Even in this electronic age, it is still important to balance and reconcile your personal and business bank accounts. For many, balancing and reconciling their accounts is still something akin to having a root canal. But today, with online banking and smartphone apps, this seemingly outmoded exercise is easier than ever before and believe it or not, just as necessary.
Before we begin this discussion, I think it’s important to differentiate between the terms balance and reconcile. These two terms are oftentimes confusing and mistakenly used interchangeably, especially by consumers who don’t use paper checks or a check register to record their transactions.
Balancing – Balancing a check book shows how much money is available in your account at any given time. To balance an account, simply add all your new deposits to the beginning balance of the account and then subtract from that subtotal checks you’ve written, ATM and debit card transactions, cash withdrawals and bank fees. This process will determine your account balance on that given date.
Reconciling – Reconciling an account compares the bank’s records to your records – your check register. Your register should contain a running total of all of your transactions (deposits, checks, ATMs and debit card transactions, ACH debits and credits, fees, etc.). By performing this task on a routine basis you can quickly discover bank errors and most importantly, unauthorized activity.
Reconciling is completed by adding all of the deposits the bank has not yet credited to the bank’s balance and then subtracting all the payments, withdrawals and bank fees the bank has not cleared from that subtotal, confirming that the bank’s records match your check register. This should be done at least monthly – online banking allows the ability and ease to perform this procedure more frequently.
In the old days, these two tasks required paper and pencil and some mathematical calculations. Today, with the advent of technology, this process can easily be completed in minutes.
The benefits of taking the time to complete these two steps, balancing and reconciling, although much less time-consuming today, are still just as important.
By not reviewing your accounts on a monthly basis, first and foremost, you are not being a good steward of your finances. You are not keeping track of the money you spend or where you are spending it. Keeping an eye on your finances helps you maintain a healthy budget, avoiding overspending, overdrafts and incurring unnecessary and costly bank fees.
Many people are reluctant to critically examine their spending habits. The initial examination can oftentimes be painful. However, the end result, especially if this periodic looksee changes harmful spending patterns, is well worth the effort. In addition, there’s just as much value in simply making sure the math is correct.
Another very important reason to go through the balancing-reconciling-reviewing exercise is to spot financial management mistakes and fraudulent activity. This helps you recognize any unfamiliar transactions and unwanted recurring deductions. The sooner you are aware of this unauthorized activity, the sooner you and your bank can take the necessary actions and precautions.
In the end, taking a few minutes to balance, reconcile and review your bank accounts is time well spent. After all, it’s your hard-earned money!
For all intents and purposes another Florida summer is gone. The kids have all gone back to school, the lifeguard stands have been neatly tucked away for another beach going season, our vacations are but fond memories and most of us are counting the days until autumn rears its temperate head.
We typically welcome this period of change, eagerly anticipating a temporary break from the hot, humid weather for which Florida is so famous. Although our seasonal transition lags a tad behind our more northern neighbors, we can still begin to set the stage, our life for all the wonderfully renewing experiences that another season brings.
Add a Few Accents
A new season is a great time to spruce up our surroundings. Adding a few inexpensive touches to our home can make a cheerful impact on our lives – colorful pillows for sofas, new drapes, area rugs or possibly painting an accent wall a bolder, richer color will add warmth to our home.
Bring the Outside In
As the temperature cools and the days shorten, we will be spending more time inside. But we can bring a little nature inside with fresh cut flowers, branches, berries, pinecones and leaves, or even a few dried gourds, adding a lovely autumn touch to our home.
Clean Out and Stow Away
Rather than pack up all our summer gear and warm weather apparel, let’s determine what we want to retain for next year and what we don’t. We can cut down on clutter and storage by making this decision now. Let’s recycle, donate, or have a yard sale to eliminate unwanted stuff, and pack the rest away.
Freshen Up the Kitchen
It’s a perfect time to clean out our pantry, cabinets and refrigerator. Throw out all old and expired items and assess what we will need for the cooler, more comfort food cooking months ahead. In addition to weeding out and stocking up, we shouldn’t forget to give our kitchen appliances a thorough checkup to make sure they are running efficiently. This is a perfect time to vacuum the condenser coils of the refrigerator, clean the oven and eliminate the grease buildup in the oven’s vent system.
Revisit the Bucket List
As another calendar year wanes, let’s review our life list or set out to make one. Let’s jot down our goals, dreams and ambitions, and begin plotting the steps to get there.
Start Cooking Again
Nothing gives our house a homier feel, especially when it’s cooler outside, than the aroma of a delicious home-cooked meal. Let’s break out our cookbooks. Let’s be adventurous and experiment with some new recipes. Let’s start sizzling, sautéing and baking again!
Maintain a Healthy Heart
Now that the lazy days of summer are over, it’s time to light the fire within us. Let’s move our activity level up a notch. Let’s run farther or walk more briskly or add more reps to our workout. Let’s keep in good physical shape over the coming winter months and save ourselves the disappointment of wishing we had when the beach and pool going weather returns once again.
Stay In Touch
As the days grow shorter and cooler, let’s reduce the tendency to shut ourselves in by actively engaging our network of family and friends in our everyday life to maintain a healthy support system. Let’s pull out our calendar and make some dates! Let’s meet for a latte, lunch or gather for a Sunday potluck dinner, and celebrate the beauty of a new season with those we care about most!
From my house to yours, “Happy Autumn!”