It is unfortunately quite common for many people to avoid checking their money accounts regularly to monitor balances. This can be because they haven’t made their finances a priority or because they are too scared of what they might find. It is a bit like going to the dentist: the longer you leave it, the more scared you get as the more likely it seems that you might have a problem that’s been left for too long.
When you ask these people whether they have enough money in their account to go for a meal out, some of them truly don’t know. They might be down to $10 or might still have $400 left over at the end of the month..
Checking your balances regularly – and ideally daily – has the following benefits:
- You instantly know how you are doing financially and how much money you have at that moment;
- Although you have a budget and most expenses shouldn’t come as a surprise, some bills that are automated might come in earlier or later than expected or can be substantially higher than expected (think energy bill for example), so you can update your expenses accordingly;
- It makes it easier to stick to your budget and to avoid overspending, this is especially true if you are accostumed to paying by credit card regularly.
- You can check for any dubious payments that are wrong – an incorrect amount or even an expense that isn’t yours.
On your way to financial independence, you’ll want to become aware of what is happening to your bank accounts to make any necessary adjustments as soon as possible and also to stay in control of your budget and making sure you are sticking to it.
If you wait until the end of each month to update your spending, I’m sure you’ll find you no longer remember whether that supermarket bill for the 6th was correct or whether you even went to the supermarket on that day in the first place.
Checking your balances really is just checking what’s happened since the last time you logged in. It is not about making payments or working on administration items, which you should do during your weekly finance review or during a different specific time you have set aside for this.
Step 91 – Check your balances daily – in summary
- Decide on how often you can commit to checking your bank accounts. I strongly advocate a daily check, but decide what works best for you. Don’t leave it to “I’ll see how often I can do it” as that just gives you a cop out to forget about it after a short while.
- Think of a good moment / time when to check your accounts that will allow you to do it everyday. Maybe whilst brushing your teeth each morning, just after your lunch break or just before going to bed.
- Mark this in your calendar, add it to your journal, set an alarm or put up a post-it to remind you to execute this new habit. It takes a while to make a new habit an automatic one, so don’t make it too easy for yourself by allowing yourself to come up with the excuse “you forgot”. Find out the best way to remind yourself of this new habit.
- Decide what balances you should check and which ones you maybe don’t need to. You’ll want to check your regular checkings account, but maybe you don’t need to check your savings or investment account. Do you have more than one checkings account you should check? Be clear on the balances that you should be aware of daily.
- When you log in, check for the following:
- Are all the movements correct? Check both outtakes as well as any money that might have come in.
- If you have any receipts from any purchases, make sure to check these against your account and insert any expenses for cash payments. If you no longer need the receipt then you can now get rid of it at the same time. If you might still need it for declaration, tax or warrantee purpuses however, put it away to be filed later.
- Are you not sure a bill is correct? Make a note of it and check it as soon as you can.
- Update your budget or spending tracker.
- Take note of anything that you see that you’d need to check, or anything you would like to change. Are you still paying a monthly subscription fee for a service that you are no longer using? This is a good moment to cancel the subscription.
- Stick to your habit, even if at first what you see is not very pleasant, with time you will feel more on top of your money flow, you will become more and more motivated to take control over your finances and will gradually see things improve. Don’t just give up if you see something unpleasant.
Checking your balances daily is one of the most powerful habits on your way to financial independence: it makes everything much more “real” if you see it every day, instead of waiting til the end of the month. You’ll start to see things coming together quickly, you just need to get through the initial unpleasant feeling of building a new habit and looking at your money disappearing left, right and centre.
Read more about my 100 steps mission to financial independence or simply decide to take control today and join us on our step-by-step quest on how to make your finances work for you, starting with step 1.