Money Talks Monday (1/8/18)

One question I am often asked by my classmates is, "Why should I balance my checkbook when I can see my balance online?" Moreover, I am asked why it should be balanced on a daily basis. The answer is very simple. Only if it has been 10 business days since there has been any activity on your account using a debit card and all your paper checks have cleared the bank, will your online balance have any level of guaranteed accuracy. Why? It's very simple. Not all retailer balance, batch, or settle their credit card processing equipment daily. In instances where a retailer does not, even a pending charge may not reflect in your online banking for days. Convenience stores, services station, and 24-hour retailers are the most likely not to "batch" their processed receipts daily. Too, online purchases are often not debited until an item is shipped; which could be as many as three to five business days after a purchase is made.

How often do you eat out, have your hair done, get your car washed, or purchase where you leave a tip on the card? Anytime you leave a tip it required manual calculation. Thus, a charge will originally appear for the purchase only and will be updated, usually 24 to 48 hours later reflecting the tip. Further more, presumptive purchases always cause a lapse in the correct reflection of your bank balance. Hotels, for instance, will post a minimal charge immediately and later amend it once it is determined no incidentals were charged to the room and/or there were not damages done to the room. Likewise, service station will immediately post a charge of $1.00-$2.00 for a gasoline purchase; later updating the posting for the full amount of gas purchased. As an added tip, when you use your debit card to pay at the pump, the pump will automatically check for a balance of $37.74; the average cost of filling a gas tank in the United States. If funds are available, the pump will allow you to pump until the tank is full, yet a presumptive charge of a dollar or two will post immediately. The full charge will be amended when the batching process is completed.

The only way to fully manage your money and to be completely on top of you spendable balance is to balance your checkbook. As a best practice, this should be done no less frequently than every 48 hours. At least once a week, you should compare all your receipts to the posting on your online account to ensure no deviations exist. One should develop a simple fling system of business-sized envelopes where, at the end of each month, all receipts for that month are placed for safekeeping. One should keep these files for two years; at the end of this month replacing the receipts in January 2016 envelope with those from January 2018. Then, simply shred the receipts from two years ago. There are many benefits to keeping receipts and balancing one's checkbook. Obviously, this is the best and only way to accurately know how much money is in one's account at any given time.

Secondly, saving receipts is wise for both tax purposes and in case you need to return a product or experience a product defect after purchase. Thirdly, it is the best way to control your money, not allow your perceived money to control you. Try it...give it 90 days. See if you cannot tell a difference in your spending power and deductive reasoning to save!

#MissAmericaServes #NC #MissMetrolina #MoneyTalksMonday #BalanceIsKey