Wednesday, October 04, 2006

Saving Time - Trust Your Bank's Math

I used to spend time each month balancing my checkbook to exactly match my bank statement. I would identify which checks had cleared, subtract the checks that had not cleared, and inevitably, get a different result than the bank statement. Begrudgingly, I would recalculate all the transactions from the month.

Years ago, a colleague convinced me that the bank’s math is always right. Simply, a bank’s business success depends on adding and subtracting millions of calculations exactly and accurately. However, my colleague cautioned that the entries may have errors and, therefore, each entry should be confirmed as accurate.

His rationale made sense to me, and my balancing experience always showed the bank’s calculations to be correct whenever there was a discrepancy. Since I like to simplify my personal finance efforts, I stopped checking the bank’s math on monthly statements. In all those years, they have only had two entry errors, which the bank corrected before I contacted them.

So every month I only check the bank statement entries, but not the math.

This is not financial advice. Please consult a professional advisor.

Copyright © 2006 Achievement Catalyst, LLC

1 comment:

GolbGuru said...

That makes sense. Check if individual amounts look right and the rest should be ok.
And, its not just about time...I think it will reduce quite an amount of calculation stress.