Three Reasons I Need to Reconcile my Checking Account Every Day

A Straight Talk on Debt

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Three Reasons I Need to Reconcile my Checking Account Every Day

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A disturbing trend has been taking shape in my home. It could have gone on for quite a while without noticing if my daughter hadn't asked a very simple question just about a week ago.

"Dad, we haven't paid for Netflix for a while, have we?"

We had given our two kids each a free month subscription of Netflix for Christmas last year. When we signed up we also got a month free as part of a holiday promotion. We told our kids that after three months were over, they could decide whether they wanted to keep it or not. 

But if they kept it, they would have to split the monthly $6.95 subscription fee.

She was right; I had not collected their payment since the end of the school year in the spring. My wife and I been in the habit of looking at and reconciling our checking account each morning.

Talking about our finances each morning kept us on the same financial page.

Somewhere during the summer our morning financial checks over coffee and breakfast disappeared, and so did our ability to stay on top of our finances. I realized that I was now reconciling our checking account about once every 8 to 14 days. 

This lapse of financial discipline has caused several issues:

  1. We Didn't Know How Much Money We Had: We used to be able to easily see our funds available by simply opening my checking account spreadsheet and adding one or two transactions.  Now it usually takes 30-45 minutes to reconcile everything before I have a clear answer.  It's hard to make good spending decisions when you don't know how much money we really have.
  2. We Began Overspending Again : When we discussed our spending every day we would know each and every day what purchases were made, and if we were about to exhaust our budgeted amount.   But because we weren't closely monitoring our balance, we also would lose track of extra purchases we made and end up over budget.
  3. We Couldn't Correct Problem Spending: You can't change what you don't track.  If I only reconcile the checking account every 8-14 days, I end up spending all my available time just bringing my records up to date.  That left no time to analyze our spending and identify areas we were spending more than we would like.  For example, when I finally took the time to peel back the covers and look at our spending for a two week period, I saw that I was visiting the grocery store almost every day after work.  The amount we were spending on our main grocery shopping trip was within budget, but when I added in all the secondary trips we were at almost double what we wanted to spend.

Since we completed our debt consolidation plan we luckily have extra funds available and our situation didn't reach a level of putting anything on credit, or getting an overdraft charge.

But we were clearly NOT being wise with our money.

We started up our old routine again of reconciling the checkbook each morning over coffee and breakfast.  It came back easily, and after a few days it felt like we had never stopped.

It feels exhilarating to know we're on the same page with our finances at all times again. Our bank account balance isn't complaining either, and I just collected October's Netflix payment from our kids.

Have you ever fallen out of a good financial routine? How did you get it started again?

Related Links:

Gradually Improving Our Finances over Morning Coffee

The Budget; let's keep it real

Organizing Your Finances Doesn't Have to be Complicated

Travis Pizel, debt management plan customer with leading provider of debt relief, CareOne Services, Inc. Travis Pizel

Travis is a contributing writer for the A Straight Talk on Debt blog. He is also a very active member of the CareOne community forums. Travis is currently enrolled in a CareOne Debt Management Plan (DMP). Travis candidly shares his personal journey to pay off his debt and the tips he's learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family in Minnesota. You can also read more from Travis on the Enemy of Debt blog, where he is a featured blogger. Compensated Blogger for CareOne Debt Relief Services.

You can follow Travis on Twitter @DebtChronicles

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  • I am wondering what kind of spread sheet you use for your checking account? I used to use Microsoft Money. that isn't being made anymore. Quicken is very expensive. I am trying to find one that is not too difficult to use, and inexpensive or free.

    Thanks,

    Gladys Anderson

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