Write a Reality Check: The Importance of Balancing Your Bank Accounts
Tuesday, March 3, 2020, 6:00 AM | Leave Comment
If your life is fast-paced, you might struggle to find time for basic tasks like balancing your bank accounts.
It’s easy to think they will take care of themselves or that you have a general idea of the current balances.
However, if you use a debit card, pay bills online, or write checks for purchases or bills, it is easy to lose track of what you have in each account.
Here are four reasons to routinely balance your bank accounts.
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Avoid Overspending
It’s easy to overspend when you don’t track your bank account purchases. Whether using a debit card or writing checks as well as withdrawing money from savings accounts, you can soon forget how much you have spent as well as what all you have purchased. Use the checking account register that comes with printed checks for checking accounts so that you always know the available balance. Alternately, monitor your accounts online several times a week to be sure you don’t get overdrawn, which might lead to a potential purchase being denied for lack of funds.
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Protect Your Credit Reputation
If your bank accounts go below the available balance, you may end up damaging your credit reputation with your bank or credit union. If you ever apply for a loan or other forms of credit, your account history could be reviewed and play a role in your being approved or denied additional credit. Another potential issue is if your frequently overspend from your bank accounts, you may have to use a credit card, and if you don’t monitor it similar to the bank accounts, you could end up damaging your credit score that could impact future credit applications.
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Stay on Track With Your Budget
Many people follow a monthly budget that helps them manage purchases as well as savings. Going off-budget for unmonitored purchases and unbalanced bank accounts could put you at risk for blowing your budget, which could seriously impact your regular bills and expenses if you are overspending on other things without realizing it.
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Skip Overdraft Fees
Another reason to keep tabs on your bank accounts is to avoid penalties and overdraft fees. Bounced checks often result in individual fees that can quickly add up, while dipping into a savings account and causing the balance to sink below the required minimum could affect the interest rate or result in a financial penalty.
The safest way to manage your bank holdings is to keep an eye on bank account balances. Balance your checking accounts regularly so that you always know how much money you have in each one as well as how much you plan to spend. This will help you keep a handle on your finances and prevent problems in the long-term.
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