Bank statements may conceal costs

MOST of us file our bank statements away when we receive them, without even opening them.

But FNB consumer education head Eunice Sibiya said ignoring bank statements could be costing consumers money and have them living under false perceptions of their financial position.

“Instant bank notifications as you transact have become an efficient tool in monitoring daily spending.

“But to remain on top of your finances you need to take a step back each month for a holistic view of how you have transacted.”

Sibiya said it is important to not only assess cheque account statements but to also pay attention to credit card and savings account statements in order to make comparisons between spending, and to track savings.

She said that for an everyday transacting account, like a cheque account, the opening and closing balance is the most important aspect.

It is usually the account from which debit orders are paid and it is important to keep it in a positive balance, so that debit orders don’t bounce.

When looking at a credit card or savings account statement, it is important to pay attention to the interest received or paid, she said.

“As with all information, the true value lies in the interpretation.”

There is no better way to determine a person’s spending patterns, than to analyse their individual bank statements.

How studying your bank statements can help you:

Sibiya suggests creating categories such as food and beverages, entertainment and so on. Then, based on a two- or three-month overview, a consumer could calculate their average spend for each category.

“It will quickly highlight in which areas you are living beyond your means and where you can cut down to put more funds towards saving or paying off debt.

“It is the ideal foundation for drawing up a realistic budget.” Analysis of a bank statement can save banking fees because it will encourage the person to make changes in their banking behaviour.

These include having statements e-mailed and using digital channels instead of drawing or depositing money inside a branch.

“Analyse your bank costs and do research about alternative ways of transacting – cellphone and app banking are often easy ways to cut back on fees,” she said.

Bank statements help keep track of subscriptions and debit orders for you to ensure the correct amounts are being debited every month. “If the amount debited is small it is unlikely you will receive an instant bank message notifying you of the transaction and, before you know it, you could have paid hundreds of rand for a service you don’t use anymore or forgotten you’ve signed up for. Check your statements.”

-Business Reporter