Bank statements are important for several reasons. Not only do they help you manage your spending and keep track of your finances, but they also serve as a way to catch errors or fraudulent activity with your account.
Here are the main things you should do with your bank statement:
1. Reconcile Your Account
When you reconcile your bank account, you are reviewing your bank statement to make sure all information and transactions are accurate. You are comparing your record of deposits, withdrawals, interest, and fees with the bank’s record. This can help you catch any mistakes or fraudulent activity. Reconciling your account can also help you avoid overdraft fees if your bank statement reveals that you have less money in your account then you thought you had.
If you see a mistake, report it to your bank, credit union, or financial institution right away. You usually have 60 days from your statement date to dispute any errors.
2. Review Your Spending and Saving Habits
Reviewing your bank statement is not only a good way to check for errors, it’s also an excellent way to gauge your spending for the month and keep track of your savings. Review your starting and ending balance; notice how much you are spending versus how much you are saving, and note where the majority of your money is going.
It’s also a good idea to see how much interest you’re earning — if your bank or financial institution gives you interest, see how much money it’s making you every month.
3. File for Your Records
After you review your bank statement, it’s a smart idea to file it in a safe place for your records. You can download them on your computer or print them and keep them in a secure place.
You might need to reference your bank statement when you file your tax return. You may also need it for applying for a loan, renting an apartment, or refinancing your home.