Posted by Chris at September 14th, 2007

What’s the monthly process so many of us go through regarding our money?  It’s reconciling the bank statement.  And yet, in this modern age of internet banking it is a complete waste of time.  Don’t believe me?  Let’s look at it together.

In the old days, you got a bank statement once a month.  This was simply a written report of every credit and every debit applied to your account over the preceding period.  This was the only information you were given, so it was neccessary to maintain your own records and then compare (reconcile) your records to theirs.  This helped save you from errors and helped isolate possible errors that the bank might have inadvertently committed.  When you only got one report a month, this was a valuable use of time.

Today, we have internet banking, and almost any bank has this available.  You can simply log into your account, at will, and examine your credits and debits for virtually any time period you like.  You can download this information in a variety of formats, as well, to suit whatever financial management system you might choose to use to keep your own records.  Now, if you chose, you could still maintain your own, independent record and then spend the time once per month reconciling it to theirs.  But I don’t feel like that’s necessary anymore.

Why not let their record be yours?  It’s available 24-7- 365.  You can download it so you retain a copy.  If you spot an error, it’s usually a lot more recent than sometime in the last month, and probably a lot easier to remember what happened and get it corrected.

The budgeting tool I use contains a checkbook register.  It uses that data to track your actual spending to compare against what you set up when you planned your budget for the month.  I used to spend hours typing in every single transaction, then it hit me.  Download the transactions from the bank!  I just import those into the software, then all I have to spend time doing is attaching each transaction to a specific budget category.  In the process, I am automatically reviewing every transaction and have ample opportunity to spot errors.

Since I believe that it’s not about the destination but about the journey, and therefore it’s not about the money itself but rather what it does for me, I would prefer to spend hours cooking, playing with my kids, cleaning the house or whatever else I enjoy doing.  Utilizing online banking reduces the time I have to spend on my money by about two-thirds.

…enjoy the ride…