If you haven’t given your credit card statements and bank statements a careful review lately, you might be surprised at what you find. As a bookkeeper, I look at many bank statements and credit card statements every month and I can tell you, it literally pays to keep a close eye on things. First, let’s talk about the most important thing to watch – your income.
Income and Credits
Today, we are relying more and more on auto deposits to receive our significant monthly income. Your initial focus should be directed to your credits, or money coming into your account. The days of the paper paycheck are numbered as organizations opt for direct deposit of payroll funds. This is a very convenient system for everyone when it works, but sometimes things can go wrong. Since there is no paper trail, when transactions do not show up in your account, it creates all kinds of financial problems. Therefore, reviewing your bank statement and credit card each month can pay big dividends by saving you time, protecting your credit and minimizing your stress. Credits that you should be looking for include:
- Payroll deposits
- Recurring income from sales and services
- Rental income
- US Treasury Social Security income
- US Treasury tax refunds
- Pension payments
- Annuity payments
- Annual Required Minimum Distributions (RMDs) from IRAs (for you older folks)
- Credits from returned items
- Rewards and rebates from credit cards and purchases
- Other income
Bank Debits and Credit Card Charges
Tracking your income is critical to your financial health, but just as important is keeping track of the money going out each month. When you look at your bank and credit card statements you should be able to identify and agree with all of the debits each month. Many companies can be sneaky by drawing you into trial subscriptions. You may use your credit card to make a purchase thinking you are paying for a one-time transaction but upon review, you realize the company has been charging you for months, even years for something you had no idea you were buying. This happens to many of us, and persistent monitoring is the only way to stop putting your money into someone else’s pocket. Many vendors and fraudsters are counting on you not looking at your statements!
The trend today is also to rely more and more on auto debits to pay for our important monthly, quarterly and yearly services. Checking our debits on our statements will ensure we are paying for critical things on time. Missing important payments can have life-changing results. In addition to valid expenses, be sure to scan for fraudulent charges. If you don’t recognize an expense, track it down and take immediate action. Here is a list of things to look for:
- Fraudulent charges
- Scheduled online bill payment items
- Price increases (companies can sneak up monthly prices)
- Recurring charges for things you didn’t purchase or no longer want
- Mortgage and rent payments
- Loan payments
- Subscriptions (you may not want that service anymore)
- Life, health, and homeowners insurance premium payments (really important stuff)
- Quarterly fees such as HOA fees, property taxes, etc.
- Cable, phone and internet charges
- Security systems and devices recurring fees (you may no longer use that security device anymore)
The best way to reduce your stress and protect your financial health is to give a close look at your bank and credit card statements each month. If you do, I’m certain you will have more money in your pocket.