10

I used to be very diligent in reconciling my accounts with the monthly statement when it came in the mail. Now that I don't receive paper statements, I rarely even look at the statement or bother downloading it from the bank website.

I track my income and spending with Mint and Quicken, and download and categorize my transactions once per week. I am paying attention to my accounts, just not to the statements provided by the bank.

Is it worth the time for me to spend reconciling my statements?

8

I quit diligently reconciling monthly statements some years before everything was online, when I realized that for years before that, every time I thought I found a mistake, it was always my own error. I was spending a fair amount of time (over the years) doing something that wasn't helping me. So I quit.

That said, I do look at the statements and/or check the transactions on a regular basis (I now use email notifications of automatic deposits as the trigger, and then look over withdrawals, too) to make sure everything looks appropriate. I'm less concerned about a bank error than I am about identity or account theft.

  • So I do check my accounts, just never the paper/electronic statement that the bank prepares. I'm mainly wondering if that's an issue, or if I'm ok just monitoring my accounts... – jjeaton Oct 7 '10 at 16:56
4

While it's wise, easier and safer to check your transactions online a few times a month, I opt to receive and file paper statements as a hard copy back up of account history. Any reconciliation I perform is a quick glance to make sure the numbers sound right.

It's probably a small waste of time and space, but it settles some of my paranoia (due to my training as a computer engineer) about failure of electronic banking systems. If someone tampers with bank records or a SAN explodes and wipes out a bunch of account data, then I will have years worth of paper statements to back up my numbers.

Having years worth of statements printed on the banks stationary will have better credibility in court than a .pdf or printout thereof that could have been doctored, in case I ever needed to take my bank to court. A little piece of mind for the price of a letter opener, a square foot file box and a couple of minutes a month.

3

Account statements and the account information provided by your personal finance software should be coming from the same source, namely your bank's internal accounting records. So in theory one is just as good as the other. That being said, an account statement is a snapshot of your account on the date the statement was created, while synchronizations with your personal finance application is dynamically generated upon request (usually once a day or upon login).

So what are the implications of this?

Your account statement will not show transactions that may have taken place during that period but weren't posted until after the period ended (common with credit card transactions and checks). Instead they'd appear on the next statement. Because electronic account synchronizations are more frequent and not limited to a specific time period those transactions will show up shortly after they are posted.

So it is far easier to keep track of your accounts electronically. Every personal finance software I've ever used supports manual entries so what I like to do is on a daily basis I manually enter any transaction which wasn't posted automatically. This usually only takes a few minutes each evening. Then when the transaction eventually shows up it's usually reconciled with my manually entered one automatically.

Aside from finding (infrequent) bank errors this has the benefit of keeping me aware of how much I'm spending and how much I have left. I've also caught a number of cashier errors this way (noticing I was double-charged for an item while entering the receipt total) and its the best defense against fraud and identity theft I can think of. If you're looking at your accounts on a daily basis you're far more likely to notice an unusual transaction than any monitoring service.

2

My wife and I are paid every two weeks. I go on line see the exact deposit, add it to register, and see what checks cleared. In effect, I reconcile twice per month, and the statement can't be different that what their system tells me. Since the online site shows "last statement balance" I feel there's no need to bother with the paper, nothing left to reconcile.

1

Banks make mistakes. Reconciling your account with your bank statement is the way to catch the errors.

  • 2
    I totally agree, but if I'm monitoring my accounts through Mint/Quicken, I should be able to catch a glaring error (ie. duplicate transactions, a huge overcharge). Also, if I'm not maintaining a checkbook register on my own, (except for actual paper checks I write), then all the data I get is from the bank itself, so I'm basically checking what the bank tells me I have, with... what the bank tells me I have... – jjeaton Oct 7 '10 at 16:53
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I don't use debit cards, but if I did I would review that portion of the statement. I look at my credit card statements pretty closely, and probably catch one or two mistakes or things I want to question every year.

0

Sounds like you are reconciling more than once a month. I like to say I glance at all my statements, but these days I just look at the final balance and call it good. If a transaction shows up by mistake, I would find it in a couple of days because of how often I update my Quicken and Mint.com

  • Not exactly reconciling, just categorizing and looking at balances. I agree, I should be able to catch any huge omission like that, but otherwise I don't want to spend too much time on this. Trying to balance diligence with productivity here... – jjeaton Oct 7 '10 at 16:55

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