A study by Lexington Law revealed, on average, 36% of people look at their bank accounts every day; 30% check once a week; 8% check twice a month; 8% check once a month; 18% check less than once a month. Take a moment and honestly consider in which category you reside.
If you said anything less often than once a week, I’m here to convince you to check your finances more often! And I’m not talking only about your bank account. You should review all accounts where spending happens on a regular basis—checking accounts, savings accounts (if you spend from here often, which I recommend you don’t), credit cards, and so on. Based on the above study, over one-third of the population, on average, checks their accounts less than once a week. Maybe that 34% of the population is just so in-tune with their finances they don’t need to look at their accounts to know what’s going on, but I doubt it. Most banks, credit unions, and credit card companies have online capabilities allowing you to monitor as often as you want, so why not start now? It certainly can’t hurt, but if you’re still unsure here are several reasons why reviewing your accounts and account activity is a good use of your time.
- It forces you to become familiar with the activity in those accounts—the vendors/companies, the frequencies, the amounts, the timing, etc. Checking these accounts for activity at least once a week will come in handy when you start the holistic financial monitoring and analysis (see article here: https://sowadime.com/2020/07/29/example-post-2/). For example, do you know which day of the month your water bill is auto-drafted? How about your car payment? Do you know how much each of those payments is and the vendor/company? If not, you should!
- It forces you to recognize financial missteps soon after they happen. This, in turn, makes you more likely to correct the behavior sooner rather than later. If you waited until the end of the month to look at your accounts, you’re 30 days behind in acknowledging you had three separate shopping sprees to Target at over $100 each! If you studied your checking account or credit card spending after the first trip, you probably would’ve asked yourself if there was a need to go back the second or third time in the same month. This one is doubly useful when you combine it with your personal budgeting process to know you were already over your monthly free-spending budget of $50 after the first trip, which unequivocally tells you not to go back a second or third time! Disclaimer: No judgement of those who routinely shop at Target, especially for necessities. This is simply an example—insert any store in place of Target, and the argument still holds.
- It helps you identify unusual, infrequent, and/or possibly fraudulent spending activity. In full disclosure, I review our checking account and credit card activity daily. It’s a quick review and typically results in no further action needed. However, on at least three occasions in recent memory, I’ve spotted fraudulent activity on our credit cards the day after it happened. Because I caught it early, it prevented additional fraudulent activity on the card. All it took was a quick phone call to the credit card company, confirmation of some personal details, answers to a few quick questions, submission of a case to the fraud department, and in all cases the credit was applied within a few business days. Some financial institutions even have functionality that allows you to dispute the charge without calling customer service—you simply click the transaction and log your dispute right through their website.
- It helps you identify any unexpected or incorrect charges—ATM fees, maintenance fees, overdraft fees, or interest charges (if you don’t pay your credit card balance in full each month). We all like to think that banks and credit card companies never make mistakes, but they do! Their systems and people make mistakes just like the rest of us. Sometimes financial institutions will waive these fees if you ask, but you must know about them to ask!
- On a separate but related note, this reason applies to more than just your checking account or credit card—it applies to all statements. This can happen with your mortgage, cable/satellite, car loan, etc.
In summary, I encourage you to check your “routine spending” accounts often. Not only can it help you detect unusual or fraudulent activity, but it brings you closer to the spending itself. Familiarity with your habits empowers you to change them, and changing habits is what’s necessary to live a more productive and freer financial life!