5 Reasons Online Banking Does Not Mean You Should Forget Your Personal Ledger

Posted on: 14 October 2015

Online banking is becoming increasingly popular. With the increase in debit and credit transactions, it is important to be able to see a constant record of what you have spent. Additionally, it allows you to easily pay your bills and see when direct deposits clear without having to go to your bank or an ATM. Unfortunately, many young people choose to depend solely on the convenience of their online banking ledger as opposed to keeping their own personal ledger. Since the checkbook is fading from use, many people simple do not practice balancing a personal ledger. But there are five reasons why you should get in the habit of tracking your own finances. 

Online Accounts Do Not Update Instantly

While sometimes you may see a debit transactions as soon as you make a purchase, many times they do not show up on your account until the close of business. Furthermore, some transactions may be listed as pending, and your balance may not be adjusted until after they have cleared. This can make you think that you have more or less money in your account than you actually have at any given moment. Keeping your own records will give you a more realistic balance and help you avoid overdraft fees. 

Businesses and Individuals May Not Cash Your Checks Immediately 

Even though paying by check is not exactly popular in modern America, it is making a comeback with some people. Checks can be useful for paying small businesses and independent contractors who cannot accept credit or debit cards and wish to avoid the fees associated with electronic transfers through third parties. However, if you give your check to an independent contractor, you have no control over when they will cash that check. Keeping your own ledger will prevent you from being surprised when that money is suddenly gone from your account a month after you have written the check.

You Need to Regularly Check for Fraudulent Transactions

There are many types of identity theft and fraud. While many people are afraid of someone using their credit card for large purchases, it is also common for scam artists to set up a regular, small recurring payment from your debit card. They hope that you will not notice these small amounts and they can skim off of your bank account for several months. A personal ledger will help you recognize when your bank account balance is off and assure you that you did not just forget that small purchase that you do not recognize. 

You Should Be Able to Access Your Records When You Don't Have an Internet Connection

Although 64% of Americans own a smartphone, having easy access to your online banking does not mean that you will always be able to retrieve your balance. If you are in an area without cell phone coverage, if you are running low on data, or if your bank's site is down for routine maintenance, you should still be able to access your balance. The act of keeping a personal ledger, of inputting specific expenditures, will help keep you more aware of your balance, even if you do not have access to your records. 

Notes In a Personal Ledger Let You Better Understand Your Spending Trends

When you see your online records, most transactions have a lot of technical information. However, they may not say exactly what you purchased and sometimes have an alternative name for the company you made the purchase from. Keeping your own records lets you see quickly and easily what purchases you have made and where your money is being spent. 

There are many options for personal ledgers including traditional checkbooks, smartphone applications, and even programs through your online banking. Whatever method you choose, it is important to keep your personal records and compare them to your bank's records regularly.


When to Use a Financial Advisor

Hi, my name is Melinda Jacobs. My husband John and I are in our 50s, and we both still work full-time jobs. I used to be of the mind that we should put every spare penny into an interest bearing savings account. That is, until we started going to a financial adviser. Our finance consultant has showed us how to manage our money in a manner that is going to not only sustain us today but also in the future. I would like to share some of what we’ve learned about saving and managing money in today’s economy and why the days of putting money into a savings account is not really practical. I hope that what I have to share proves to be beneficial to you.