Is Balancing Your Checkbook Obsolete in the Digital Era?

Author: Brittany Randolph

Portfolio Associate

Given modern technology and online banking, you may have forgotten how to balance your checkbook. Or maybe you just never learned how.

You might recall sitting among seemingly endless piles of papers and statements, with your checkbook and checkbook register in hand, sorting through the mess and trying to make it all reconcile. But times have changed. The stacks of papers are a thing of the past.

Yet there’s never been a better time to balance your checkbook than today.

Why is that?

Turns out that many of the old paper-based techniques still apply. More importantly, you can avoid costly bank fees, reduce the impact of identity theft, and find ways to spend less—and save more. Let’s look at each in turn:

• Avoid fees. One important reason to balance your bank account is to avoid overdrafts, e., trying to spend money that you don’t have. Even with today’s technology, transactions to and from your account can get delayed. Thus the true amount doesn’t show up on your balance while the transaction is still “pending.” As a result, the “available balance” is inaccurate; in other words, you can get tricked into thinking you have more money in the account than you really do. Then you go and “spend” it… and you can guess the rest. Overdraft fees can be costly; banks purposely charge a lot for them. So balancing your account can help you avoid them.

• Fight back against identify theft. Taking the time to examine all of the transactions in and out of your account may feel tedious, but it’s worth the time and effort to help you avoid the impact of potential identify theft. Look through your transactions. You should be able to spot any fraudulent charges that appear. When you discover these early, you can contact your bank (ASAP!) and begin the process of preventing more fraudulent transactions from piling up. This bit of diligence pays for itself in terms of saving you money, limiting the damage to your finances, and reducing the resulting stress as much as possible as you remedy the situation.

• Spend less, save more. While it won’t eliminate the urge to buy those things you want but don’t need, balancing your bank account can help you save money. When you balance your account, transaction-by-transaction, you’re necessarily aware of what you’ve been spending; in other words, it becomes easier to spot trends in your spending habits and spotlight areas where you could cut back. So the next time you’re in that situation, you’ll be able to ask yourself “Is this worth it?” before you swipe that card. Making yourself aware of areas where you can cut back can help you make better decisions going forward, while boosting your savings, too.

Balancing your checkbook may seem like a task from the past that’s been rendered obsolete by modern banking technology. But as you can see, it’s still relevant, powerful, and valuable.

And of course, if you have any questions, be sure to contact us. We’ll be happy to help.

Author: Brittany Randolph, Portfolio Associate

As our Portfolio Associate, Brittany provides support for compliance, portfolio accounting, and firm financials. She’s also a part of our marketing team. She loves learning, providing service with a smile, and—every now and then, when they least expect it—getting a chuckle out of her teammates!