One of the best ways to maintain financial health is managing your bank accounts. With a single bank account like many people this simply involves balancing the check book at the end of the month. With various bank accounts this can be quite challenging.
But it is good work because if you want to get somewhere financially you have to know where you are right now.
Good record keeping is the first step to a good bank account management. How you organize your bank accounts to achieve this is up to you. Use a system that works for you and that is not so intimidation that you have to slack off from the required monthly work.
A shoebox or a simple file folder make some people happy. Others are more satisfied using a computer software. How you organize your records is up to you but you should begin with it now.
The minimum you will want is access to all your monthly statements for each of your bank accounts. This might include your checking, savings, money market, CD’s, etc. Bank accounts like your checking’s and savings will require an active reconciliation. Certificates of deposits on the other side would not require any work on your part at all other than updating your current balance.
It might take a few hours to a couple of days to organize your records depending on how far you have to go. But once this is completed you can begin using your efforts to better enhance your financial health.
To get a great example of how managing your bank accounts can help better understand where you are today financially just take a look at your checking account statements. If you are constantly short of cash at the end of the month take out your last three or four statements. Then sit down with pad and pencil.
Go through each statement and make a list of what you are spending your money on each month. Using braid categories such as food, rent, entertainment and gasoline can make it easier and more effective. Then list each check amount under the appropriate category. It might be surprising how much money you spend on things you could be able to live without.
Once you have set up the files for all of your bank accounts you will need to find a safe and secure place to keep them. The investment in a fireproof lock box is something you should do if you plan to keep them at home. Another good option is renting a saftey box at the bank.
But no matter where you store these documents, be sure that they are protected from the elements and accessible when you need them. Other important papers like tax records, legal papers and insurance policies can also be stored in the same place to be protected from loss or damage.
