By Taylor Nunley. Edited by Arjun Chandrasekar.
Overview
It can be hard to keep track of all the different transactions made with an account. Thankfully, monthly statements exist to help in an easy, accessible way. Sometimes called a billing or periodic statement, these financial records are delivered monthly to patrons and summarize their account’s standings. Not all monthly statements are created the same, though. Each corresponds to the specific type of account the holder has with a tailored role. These statements should never be ignored as they provide the most important, vital information all in one place.
Types of Statements and Their Functions
Statements for both checking and savings accounts show their current balance, but checking accounts will report if the account is overdrawn while savings accounts list the withdrawals made in the past month. On the other hand, a monthly credit card statement shows the total amount owed in the previous month. But these statements are used for more than just bank accounts. Any big loan arrangements, such as those from a car payment or mortgage, have their own monthly statements to help make the process smoother. Though all of these are very different, they all share the same goal of making it easier for the patron to keep track of their debts and money.
Requirements for All Bank Statements
All bank statements, regardless of their type, will contain information about the bank and account holder. Other details, such as account information, the statement’s start and end date, and differences in the balance from the beginning of the month to the end will also be included. Credit card statements can be more detailed, informing the patron about minimum monthly payments, years until the card is paid off, and if you’re enrolled in a rewards program, the total points available.
The Significance
To some, a monthly statement may seem to be nothing more than a glorified receipt. But they can be useful in seeing patterns in your spending or even detecting fraud. Keeping track of deposits and making sure checks go through can catch human error or even embezzlement. Checking and verifying all your purchases can also prevent a disastrous case of identity theft. On the tamer side, seeing all these purchases in one place can open your eyes to needless spending and help facilitate a more mindful approach to money. Monthly statements can also prevent financial problems before they start by making a patron mindful of late charges and interest rates on their account.
Conclusion
Checking your monthly statement is a good habit to develop that, at worst, can be slightly monotonous and boring and, at best, saves you from a lifetime of financial trouble. Paying attention to all of your purchases and how they fit together is the first step to becoming financially conscious!
