Make a date with your bank statement every month and your personal finance will soon fall into place. That is the advise of Ryan Prozesky, CEO of FNB Value Banking Solutions.
And you might also come across unauthorised debit orders, something which has grown into an epidemic over the years.
Prozensky notes that consumers who only focus on what is coming and going out of their accounts are missing out of the benefits of the financial data available in their bank statements. This data can be used to greatly improve personal finance.
“Bank statements are not just a great way of keeping a record of all your transactions every month, this is also the perfect starting point when planning a financially stable future,” says Prozesky.
“It is fairly easy to bury your head in the sand when it comes to finances, however since the bank is required to record every single cent in your bank statement, it is very difficult to hide away from the reality of your finances. Consider signing up for email statements, which don’t attract a charge,” Prozesky.
He unpacks three benefits of keeping tabs on your bank statement which can improve personal finance:
Keep on top of your budget
“If you have no idea of what is coming in or out of your bank account, there is no way you are able to budget effectively. In fact, your bank statement is the perfect place to start budgeting, if you don’t have one in place, or aren’t the best at keeping on top of it,” says Prozesky.
Highlight unnecessary spending
By going through your bank statements line by line you will soon see the small charges that may be completely unnecessary.
“This can be in the form of an old policy you have no use for or a subscription,” says Prozesky. “The quicker you get on top of this, the sooner you will be able to start saving, you will be surprised how these small items add up quickly.”
Unnecessary spending doesn’t have to be only small items. Sometimes it is a few hundred rand or even more.
“Looking back at your bank statement, you have to be honest with yourself about which of the larger purchases, such as electronics or purchases at clothing stores, you really make use of,” says Prozesky. “Cutting down on big spending can put you in a far stronger position financially to build up your savings or put the money to real work.”
Understanding bank fees
This is a good opportunity to also get to grips with any banking fees that you may not understand.
“You will soon note avoidable high fee transactions such as drawing cash or making transactions in branch,” says Prozesky. “Once you are aware of these line items you can substitute them for low or no costs transactions, such as swiping your debit card instead of withdrawing or using electronic transactions.”