Definition
The process of comparing your personal records with your bank’s statements to ensure all transactions are accurate.
What to consider
- Do it monthly to catch any errors early.
- Compare your records with the bank’s report carefully.
- Tackle any discrepancies as soon as you notice them.
Real world scenarios
- Lily cross-checks her checking account against the monthly statement, catching a duplicate charge at a restaurant. She quickly disputes it.
- By reconciling weekly, Karl never faces a surprise negative balance. He adjusts spending immediately if something unexpected appears.
- Careful reconciliation helps Tori maintain accurate records for tax preparation, leaving no room for guessing about her finances.
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