Tips On Your Checking Account
Most of us open our first checking account by age 20 But
just because we’ve had one for years, that doesn’t mean that we
manage it properly When is the last time you balanced your bank
account? If it’s not part of your monthly routine, your
inattention could carry a price If you lose track of how much
money is in your account you could get slapped with expensive
insufficient funds fees
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But it’s not hard to get a handle on your account These seven
simple steps can help you keep your checking account under
control:
1 Keep good records
The more informed you are about your checking account, the
better equipped you’ll be to read and analyze your bank
statement
“You have to have something to compare it to in order to know
whether it’s right or wrong,” says Michael Stahl, author of
Early to Rise: A Young Person’s Guide to Investing
That means keeping track of account activity And you do have
choices You can keep a handwritten record of transactions using
the register that comes with your checks Or use a software
program, such as Intuit’s Quicken or an online version of your
favorite financial program The point is to have a record of
every check, deposit and electronic fund transfer that’s
involved with the account
2 Open your mail
When the bank statement arrives, open it and put your record
keeping to good use Do it right when you get the statement,”
Stahl says “Don’t wait” It’s better to examine your bank
statement sooner than later for two reasons First, if there are
any mistakes, reporting them to your bank quickly will ensure
they get corrected Banks usually will disavow errors if they
are reported more than 60 days after you received the statement
Second, the fewer days that pass between when the bank issues a
statement and when you read it, the more in synch your records
will be with the bank’s numbers “It’s less confusing and easier
to balance your bank statement if you do it as soon as you get
it, not three months later,” Stahl says
3 Scan first
If you’re pressed for time, you can get away with examining just
the account summary, says Susan Zimmerman of the Zimmerman
Financial Group in St Paul, Minnesota 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 ball park,” Zimmerman says For
example, you can see if the balance is roughly what you think it
should be or whether the amount of withdrawals is way too high
Look for any unusual or unexpected fees
Keep in mind that bank statements cover a set time period, say
from Jan 18 to Feb 17, so any checks you’ve written around or
after the closing date won’t be on the statement Ditto any
deposits you’ve made in the meantime
4 Spend quality time with your account
Scanning’s a good first step, but don’t stop there
“Go over the deposits and the checks,” says Paula Wegner, vice
president of the
enbcom” TARGET=”blank” CLASS=”body-link”>First Eagle National
Bank in Chicago “Check all checks from your bank statement
against your check register Check off all checks”
Wegner’s emphasis on scrutinizing your posted checks is
intentional You need to see whether your payment records match
what the bank has
Most bank statements will give you several ways of doing this
For example, some allow you to see what checks have been posted
by including a copy of the check The advantage: it shows you
who the check was written to Even when canceled checks are part
of your statement, your monthly accounting probably will also
include a list by check number of your transactions Here you’ll
see the check number, amount and when it posted, but not the
payee
Similar information will be listed on incoming cash to your
account For checks paid and deposits credited, make sure your
records jibe with the bank’s books
5 Call your bank immediately if you find a problem
You’ll be glad you closely followed your account’s paper trail
if you find yourself in a situation similar to one encountered
by financial planner Zimmerman
She got a notice from her bank saying that her youngest son’s
checking account was overdrawn by 56 cents It wasn’t much, but
it didn’t sound right When Zimmerman called the bank, an
officer there told her that the account wasn’t in arrears and
the bank wasn’t sure how she had received the overdrawn notice
Zimmerman’s story had a happy ending (the bank acknowledged its
mistake), in large part because she was paying attention and
immediately acted on a discrepancy If you report problems
quickly, they’re likely to be fixed quickly and not escalate
It’s also easier to track things when they just happened vs six
months ago
And by being prompt in your account reconciliation, you show the
bank that you are trying to stay on top of your finances That
diligence could later pay off For example, Zimmerman recommends
that if you bounce a check, and it’s the first time, ask for
forgiveness including waiver of any fees
“Lots of people don’t realize that the rules can been waived and
often a bank will do that for good will,” Zimmerman says Of
course, don’t expect to get off easy if you are a repeat
offender
6 Check daily balance summaries
First Eagle’s Wegner says that most people don’t need to analyze
their daily balance summaries However, there are exceptions:
consumers with interest bearing accounts or those who must
maintain a minimum average balance
People who fall into these categories may want to keep closer
tabs on daily balances to make sure their accounts are in
compliance or to make sure they are paid the appropriate amount
of interest
7 Keep tabs on your account between statements
OK, maybe only truly obsessive people review their accounts
daily via phone or the Internet
But periodic checking on your account between printed statements
does sometimes make sense That’s the case when you are
expecting an out-of-the-ordinary transaction: Has that payment
to the Internal Revenue Service been posted yet? Did that big
freelance check clear?
Most of these tips don’t take much time And once they become a
part of your financial routine, you’ll find it’s easy
maintaining a healthy checking account
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Tags | account, banks, budget, electronic, handwritten, insufficient, michael, money, stahl, young
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