Our good friend and neighbor Hannah stopped by our house the other day. Hannah is Nora’s housemate from graduate school at the College of William and Mary.
“What are you doing?” Hannah asks.
I think she knows but I play along: “I’m reconciling my checkbook.”
“You’re doing what?” she says exaggeratedly. “I didn’t know anyone did that anymore.”
“I take it you don’t?”
“No, I scan my bank statement, but that’s about it.”
I’m surprised and I’m not surprised. I’m surprised because Hannah is a former CPA, so I would think financial rigor would pulse through her veins. I’m not surprised because checkbook reconciliation seems to be going the way of telephone landlines, manual transmissions, newspapers, and church attendance.
As for me, I’m old school with a twist. We still have a landline, I still drive a manual transmission car, I still read a newspaper most days, and we still attend church. And I still balance my checkbook every month.
The twist is that I love how technology can augment a traditional product or operation. Like a lot of people, I can’t live without my smartphone. My favorite part of my manual transmission Mini Cooper before it died? It’s killer seat heaters. My church membership is enriched by my ability to listen to sermons online if I want to.
Similarly, I adore how mobile banking has married more capabilities with more convenience. I deposit all my payroll checks using my Bank of America phone app (Yes, I know that most companies have direct deposit – please tell that to my employer). I pay all my bills the same way.
Still, I won’t give up my monthly manual actual-pen-and-paper reconciliation. Here’s why:
- I want to catch any mistakes. It’s exceedingly rare, but occasionally the bank makes a boo-boo. I’ve caught every one of them.
- I want to catch any unexpected fees. I’m pretty sure that, as a client, I’m a money-loser for my bank. That is, unless they can find a way to slip in new fees or other charges. I watch for these like a hawk.
- I want to make sure I don’t overdraw my account. Like most families, we spend money about as fast as we make it, so there isn’t much of a safety net. I try to record every check and deposit in my register, but there is always the occasional cash withdrawal or debit charge that slips through. Balancing the checkbook every month catches these forgotten activities before they accumulate and trigger an overdraft fee.
- I want to know when a check I’ve written doesn’t clear. My sister called me the other day: “Where is my citrus that Pippa was going to send me for her fundraiser? I gave her money for that months ago!” Turns out, the fundraiser was canceled and Pippa, playing the typical teenager, didn’t bother to inform her. Pippa hadn’t cashed the check, either, but my sister didn’t know it.
- I want to drag my nose through my expenses again. Want to save money? Experience the pain of spending your hard-earned cash twice – once when you expend it, and a second time when you reconcile your checkbook.
- I get a certain satisfaction when my records match the bank’s official records. After adding in uncashed checks and debits, and subtracting out unrecognized deposits and credits, there’s nothing like having the glowing number on your calculator match the total on your bank’s monthly statement. Yes, I know, I’m weird that way.
One last old-school note: I don’t want to do my reconciliation online or in a software program. I’m not too worried about security or privacy. It’s more that I prefer to do some things offline. I’ll take a real book over an e-reader any day. I stare at a computer all day for work – firing up one at home is the last thing I want to do. And there’s a certain reassurance in having an accurate hard copy of all your account activity within easy reach.
Want to experience the joys and benefits of balancing your checkbook every month? Here is a pretty good primer for beginners.
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