Auditing your accounts = Knowing what you have and have spent

It is extremely important to audit your accounts….making sure all are balanced (to the penny), so that you won’t spend what isn’t there.

Although online banking does this, a check register is another way.  The written register subtracts a written check amount, subtracting it from the remaining balance.  The online version allows that same amount to ‘sit’ there until the amount is cashed, letting you think you have more than you do. This is how overdraft fees occur.  It shows more than what you have written out.

Savings accounts are just that….the money there is being saved for something specific… your Cash Reserve ‘Cushion’ Account – is used only should the time come when you are temporarily out of work, for whatever reason, thus receiving no paycheck.  Your goal for this account is 9 – 12 months of your income.  It will carry you over until you, once again, receive a regular income.  If you’re just starting it, it may seem daunting.  The thing is to start it and consistently add to it …. you probably won’t need it immediately, so this give you time to save and watch it grow.  It is there should your income stop for any reason.

The other account, the Liquid Emergency account is the one there for – only – things such as a large appliance purchase, a plumbing issue, car tires or repairs, dental, eyeglasses etc.   These accounts should ‘sit’ there and be added to frequently. Two or three thousand dollars is a good figure to have in it.

Checking accounts need to be continually checked and balanced….. it only takes minutes, yet is so important and should not be neglected.  Never.  And never….pay a bill before the deposit of cash for it has been added to your account.  Don’t think that ‘by the time they get the payment, the money will be there’…. That’s not always the case and it’s how wasteful overdraft fees occur.

If you use your credit card, save your sales slips – put them in an envelope in a handy drawer….when the bill comes in, get the envelope out and check off the slips to the bill.  It will probably check out right, but occasionally there is a charge which doesn’t belong to you.  If so, call the customer service number on the bill and clear up the issue with them.  If you don’t check your bill each month, you could pay for something that someone else purchased.  It happens occasionally.  Pay credit card bills in full and before the due date to avoid fees.