For most of today’s consumers, what used to be a piece of essential knowledge for keeping track of your day-to-day finances — how to balance a checkbook — has been made much faster and easier by modern technology. In fact, thanks to advances like digital banking and mobile banking apps, along with the proliferation of credit cards and debit cards with associated websites and/or apps available, how to balance a checking account is arguably dated know-how that’s simply not a must-have any longer. (Further, combine these innovations with digital payment services like Venmo and PayPal, and it shouldn’t be all too surprising that many modern American consumers rarely even write paper checks anymore.)
6 benefits to tracking your spending
Even with apps, online accounts and other digital tools performing most of the spending tracking, expense categorization and other heavy lifting for today’s consumers, it’s still important to balance your checking account. (Or it’s at least important to keep a close eye on where your account balance stands and where your money’s going.) So if you’re left wondering “Why is it important to balance your checkbook?” consider these six big benefits to keeping a close track of your income, expenses and account balances (even if no checks — or paper of any kind — are involved):
- Added spending insights — By regularly reviewing your spending, you can gain a stronger understanding of where your money is going — and begin to develop valuable insights about your spending habits. This knowledge can be especially helpful in identifying areas for improvement and looking for ways to devote more of your money to achieving your financial goals.
- Overspending avoidance — In the same vein as the item above, another big benefit to tracking your spending is that it can help you recognize areas in which you may be spending too much. For many, an especially helpful approach here is to pay close attention to the categories your spending falls into, such as housing, food, transportation, utilities, entertainment, etc. When doing so, you can look for areas where you might have opportunities to cut back on your spending and save.
- Accuracy assurance — By keeping a close eye on your running record of bank transactions and your account statements, you can compare the expenditure amounts seen there to any spending records that you’ve retained, such as receipts, invoices and bills. If you notice any discrepancies, you can report them to your bank and/or to the party you paid so that any errors can be addressed.
- Fraud prevention — In addition, frequently reviewing your account transactions and bank statements can help you spot any spending that may be unfamiliar to you — and quickly identify any fraudulent transactions that may appear. If you discover any charges, transfers, etc. that you didn’t make or authorize, you can report them to your bank as soon as possible, helping you get them resolved more quickly and helping prevent any further fraudulent activities.
- Reduced overdraft risks — Of course, by maintaining awareness of your spending and where your account balance stands, you can take steps to avoid making any charges beyond the funds you have available in your account. Doing so will help you avoid incurring any overdraft fees that your bank may charge for checks written or charges made when there are insufficient funds available in your account to cover them.
- Laying a foundation for budgeting — While tracking and scrutinizing your income and expenses is not the same thing as budgeting, it’s a major component of the process. By developing a strong understanding of how much money is flowing into and out of your bank account each month, along with where it’s going, you’ll be laying a great foundation for taking the next step of creating and implementing a household budget. And budgeting, of course, is one of the best ways to take greater control of your finances, build more savings and make strides toward reaching your financial goals.
Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs ranging from checking and savings to retirement accounts, mortgages, other personal loans and more, visit arthurstatebank.com.
