What is a statement?
When you have a bank account, you will receive a statement - either through the mail or electronically - detailing your activity for the past month. Checks, credits, debits, deposits, interest, transfers, and withdrawals are just a few of the transactions that may appear on your monthly statement. Here's an example of what your statement may look like:
What is a statement for?
The first page of your monthly statement is usually a snapshot of your account's activity. The subsequent pages of your statement give a detailed summary of all your account's transactions. It is important that you carefully review your statement and make sure your records match your bank's.
Each bank organizes its statements differently, but all have pretty much the same components: deposits, withdrawals, checks, and service fees. In addition, all entries on your statement will have the date, a brief description, and balance. Here is what your monthly statement might look like:
Reconciling Your Statement
Reconciling - or balancing - your statement might seem inconvenient, but it is in your best interest to double check your statement, as errors can sometimes occur. To reconcile your statement, you will need a calculator, pen or pencil, and a piece of paper.
STEP ONE: Take note of the statement period, which narrows down which transactions you will be reviewing. Make sure the dates on your receipts, deposit/withdrawal slips, etc. fall within the statement period.
STEP TWO: Separate all your receipts, deposit/withdrawal slips, etc. into different piles corresponding to the sections on your statement.
STEP THREE: Go through each section and compare the transactions listed with your receipts, deposit/withdrawal slips, etc. If you don't recognize something, call the bank.
While this might seem like a tedious and time-consuming task, it will benefit you in the long-run. Regularly reviewing your statement will allow you to better understand how much you spend, what you spend that money on, and will keep you on alert for irregularities.