The Best Ways to Manage Your Financial Accounts

Updated on February 24, 2018
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Dreamworker has a lifetime of business, career and financial experience she shares with her readers here.

We all lead busy lives, but if you are not making time in yours to manage the your finances, you could be losing money without even realizing that you're doing so.

How much work it is to do this depends on the amount of money you have.

Those who don't have much generally will only need to do a monthly review of their checking, savings and credit card accounts.

However, those who are more well off will also have to learn how to analyze their investments to make sure their money is earning as much as possible for them.

Many in this category pay accountants to do this work for them, but it's still a good idea review various types of investments, the yields they bring and their risks so that you can talk intelligently about them with your accountant.

For purposes of this article, we'll look at the most common types of accounts which are

  • checking and credit card accounts,
  • savings,
  • money market,
  • CDs and
  • annuities.

Learn how to manage your money so that you gain rather than lose.
Learn how to manage your money so that you gain rather than lose. | Source

Tools You Will Need

To review your accounts yourself, you will need to learn how to balance your checking account each month and also justify your credit card accounts.

Directions for doing so are right here in this article.

For money market and CD accounts, you should acquaint yourself with financial sites such as bankrate.com and bauer financial.

These two sites will be discussed in more detail later in this article.

Check Registers

Before you can balance a checking account, you need to have an updated check register.

A check register is a little book where you write in information about

  • the date you spent money or took it in,
  • what the item was for
  • how much you spent or deposited and
  • a running balance that goes from the beginning of the month to the end.

Each time you make an entry you should either add or subtract the items so that you can see what you still have to spend from one day to the other.

You must have a correct and complete check register if you want to balance your checking account.
You must have a correct and complete check register if you want to balance your checking account. | Source

Balancing Your Checking Account

There are many methods you can use to balance a checking account, but the end result should always be that the final figure in your checkbook should match the ending balance that shows up on your bank statement.

Your bank statement usually shows up on or around the first of each month.

When it arrives, take out your check register and start matching your deposits and withdrawals.

Put a check mark next to the items that match one another in your check register as well as your bank statement.

Once you are finished doing this, you should be able to see that each item has another that matches it.

Ideally, the balance on the statement should match the balance in your checkbook.

However, sometimes you enter an item in your checkbook that has not yet been received by the bank for some reason.

You should subtract items like these from the balance in your checkbook. Once you do, both balance figures should match.

If they still do not match, you’ll have to go back and rework your math because you probably made a mathematical mistake.

Sometimes you’re only “off” a penny or two and will be tempted to just ignore the problem.

This is not a good idea because by not taking the time to find the error you will be putting yourself in a position that will keep you from knowing the exact amount you have in your account.

You will need to have this information if you ever decide to close your account.

If you do not have it, you’ll continue to pay fees month after month for an account you no longer want and really cannot use!

The attached video shows you a different way to balance your checkbook, but I have found my own way to be very effective over the years.

Justifying Your Credit Card Statement

Justifying your credit card statement means comparing the receipts you have in hand with the items that are listed on your monthly statement to make sure that they match.

To be able to do this you have to keep all of the receipts you get each month. This is easy to do if you simply put them in an envelope each time you get one.

When your statement arrives, separate the slips into categories, and then begin the process of putting check marks on the statement as well as on the receipts until you have matched all of them.

  • If you see an expense but do not have a matching receipt for it, it could mean that someone has hacked into your account. It could also mean you lost the receipt.
  • If you do think someone has illegally used your account, you should contact the credit card company and file a dispute.
  • If the amount on the statement does not match the amount on the receipt, you may have been over (or under) charged for something.
  • On the other hand, if you have the receipt but the purchase does not appear on the statement, you need to save the receipt so that you can use it when you justify the next month’s statement.

Sometimes clerks fail to enter amounts properly. When this happens, you don’t get charged for a purchase or a service. You should then contact the company or store, tell them what happened and ask them to resend the receipt to the credit card company.

People who don’t take the time to justify their credit card accounts create financial problems for themselves because they miss mistakes and other issues that impact their accounts.

Why Should You Do These Things?

People tend to think that the bank always “get it right,” but making this assumption can be a big mistake.

Banks are made up of people, and people make mistakes. If the one they make deals with your money, it is you, not they, who lose out.

So, if you want to protect the money you work so hard to earn, you would be wise to learn how to do these tasks.

The biggest reason for justifying your checking account is that doing so will always let you know exactly how much money you have in it (providing you take care to add and subtract correctly).

When you don’t have this information, it becomes very easy to overdraw your funds.

When this happens, checks bounce and banks and businesses bury you in expensive fees and penalties.

Justifying credit cards is equally important, but for a different reason.

If you don’t keep an eye on your monthly credit card bill, you won’t know if someone might have stolen your information and made a good deal of expensive purchases in your name.

You’ll get the credit card bill, but you won’t understand why it is so high!

  • If you catch the problem and call the card company as soon as possible, you won’t have to pay anything.
  • If you don’t, you’ll be paying for things you didn’t buy!

Credit card justification is also important because it lets you know whether you’ve paid your bills.

For example, I paid my property taxes last year with my credit card online, but when my statement arrived, the charge did not appear.

I had made a mistake when making my payment, so the charge did not go through. Thus, I had to pay a penalty because my payment did not arrive on time!

These may seem like little things, but they can add up quickly. They can also multiply due to late fees and penalties.

I once had a bill for $35 add up to almost $100 because I was sick and forgot to pay it.

Saving and Money Market Accounts

When you put money into a bank savings or money market account, you always get a receipt for the amount of your deposit.

You should save these in a special file so that each month when your bank statement arrives, you can match the receipts with the deposits (or withdrawals) to make sure that the amount you see is correct.

By checking these things you also give yourself the opportunity to see how much you are earning.

If you don't like that amount you can search bankrate.com to see if you can find a bank that pays more.

One caveat with doing this, however, is to make sure that any bank you choose is FDIC insured and also rated as high as possible. You can find the ratings for any bank in the country by searching Bauer Financia

You can also use these sites to learn about what is available for investing in Certificates of Deposit.

Certificates of Deposit

If you think you want to move your money over to a CD, there are a few things you should understand, the most important of which is that once you place your money in this investment instrument, it is not as easy to retrieve it as it is with a savings or money market account.

Generally, a CD will pay higher interest, but you need to leave your money in it in order to obtain it.

Once you've done your research and have invested, the only "checking" you will need to do is to pay attention to the maturity date.

In most cases, once the CD has matured, if you don't inform the bank as to what you want to do with your principal and interest, they'll simply reinvest it at the going rate, which may be lower (or higher) than what you were earning before.

They will send you a reminder letter about a month in advance, but it will be up to you to make sure that you provide directions about what you want them to do.

You work hard for your money.  You should do whatever you can to keep it.
You work hard for your money. You should do whatever you can to keep it. | Source

Annuities

Annuities are a completely different form of account because they are considered to be long term.

However, you get to choose the term from a menu a company provides.

There are numerous types of annuities, so the checking you need to do with them is to learn all you can about the pros and cons of investing in each type.

Once you put your money into an annuity, your interest grows tax free. However, trying to get it back can lead to massive losses due to tax penalties.

In most cases, the money must stay until you reach the age of 59 2/2 unless you want to lose money.

Once you reach the point of wanting to make long term investments like this one, you might want to get professional help.

However, this is another area you need to check thoroughly before moving forward with your investment.

How to Double Your Money With Good Financial Management includes a section that explains the differences in training for various types of financial managers. You would do well to read it before seeking financial guidance.

Financial counselors can advise you about other types of investments as well.

No matter who you choose, be sure to employ one who charges a flat rate rather than a commission because he won't be able to earn anything from the products he tells you to buy.

Protect Yourself

As noted throughout this article, the important point here is that you should want to maintain control of your money.

You do this by making it a point to always check your

  1. financial accounts,
  2. the institutions that hold them and
  3. the advisers you employ to help you make sound decisions.

You work hard for your money. You should work just as hard to keep it.

Making it a point to manage all of your financial accounts on a regular basis is the best way to do this.

Are you spending enough time overseeing your financial accounts?

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    © 2018 Sondra Rochelle

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