Checking accounts are often the first step for financial freedom for many.
For teenagers, it can be an excellent learning tool as far as building money management skills. For those just entering the workforce, you can hook it up to direct deposit so you can pay your rent. For everyone else, it is just a huge convenience and time saver. But with the privilege of managing a checking account comes the responsibility of balancing your checkbook.
With the advent of online banking, it may sound like an antiquated notion, but it is still extremely important to balance your checking account regularly.
Protecting against checking fraud
Everyone knows that fraud and identity theft are on the rise. By taking the time to resolve your checking account with your account statements and the checks and withdrawals you made, you can quickly detect anydiscrepancies. The quicker you react, the faster the bank can freeze your account to prevent any additional theft from happening.
Catching banking errors
Like the infamous Monopoly card reads "bank makes error..." and it may be up to you to catch it. For example, what if you opt into direct deposit through your employer and for some reason your paycheck was deposited into someone else's account?
Without checking and balancing your checking account you may not realize the error until you receive notifications from your landlord, electric company and others saying you are past due on your account. Checking your account balances regularly will help prevent that.
Consider you receive a letter from the IRS requesting that you pay thousands of dollars in back taxes as they have no record of it. If you regularly balance your checking account, you will more easily remember when those checks cleared and organize the paperwork to prove them wrong and keep you in good standing with the government.
Keeping mistakes from becoming catastrophes
Most importantly, everyone makes mistakes and by balancing your checking account you can prevent them from evolving into catastrophes. Even the greatest mathematician can make an error and misjudge their finances or the timing of a bill payment. If you regularly calculate your checking account balance, you can catch those errors before they take place and prevent being saddled with overdraft fees for "insufficient funds."
Whether you want to kick it old school and manually track the balance of your checking account in a book or just track your account online, do it. Maintaining and keeping track of your checking account is an important step for proper money management.
