Managing money is a very important part of our daily lives, but many people forget to look closely at their own bank accounts. One of the easiest ways to stay on top of your finances is to review your bank statements. You might wonder, “name two reasons why it is important to check your bank statements on a regular basis”. The answer is simple: it helps you keep your finances safe and healthy.
By checking your statements often, you can see exactly where your money goes and catch any mistakes early. This habit gives you more control over your spending and savings, while also protecting you from fraud or hidden charges.
Why Checking Bank Statements Matters
Your bank statement is like a monthly report card for your money. It shows all deposits, withdrawals, card payments, and fees. Reading your statement regularly might sound boring, but it is one of the best financial habits you can develop. Not only does it help you track your spending, but it also protects you from fraud and mistakes that could cost you money.
Below, let’s explore two major reasons why it is important to check your bank statements regularly, and how each reason can improve your financial well-being.
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Name Two Reasons Why It Is Important to Check Your Bank Statements on a Regular Basis
Reason 1: Spotting Fraud and Unauthorized Transactions Early
One of the biggest reasons to review your bank statement is to catch fraud or unauthorized charges quickly. Fraud can happen to anyone, even if you are careful. Someone could steal your card details, use your account number, or make online purchases in your name. If you don’t check your statement regularly, you might not even notice until it’s too late.
How Fraud Happens
Fraud can occur in many ways:
- A hacker steals your debit card number from an insecure website.
- Someone gets your account details through phishing emails or fake calls.
- A merchant accidentally charges you twice for one purchase.
Why Early Detection is Crucial
Banks usually offer protection for fraud, but only if you report it within a certain time frame. By looking at your bank statement every few days or at least once a month, you can immediately notice strange charges. This helps you contact your bank quickly to block your card, dispute the charges, or open an investigation.
Real-Life Example
Imagine you bought groceries for ₹1,500, but your statement shows a charge for ₹3,000 at the same store. If you catch it early, you can contact the store or the bank and get your money back faster. If you don’t check, that money could be gone for months — or permanently.
Benefits of This Habit
- Peace of Mind: You know your money is safe.
- Faster Action: You can block your card or account before further fraud occurs.
- Better Relationship with Your Bank: When you report issues quickly, banks can help you more efficiently.
Reason 2: Managing Your Budget and Identifying Hidden Charges
Another strong reason to check your bank statement regularly is to track your spending habits and spot hidden fees. Many people don’t realize how much money they spend on small purchases or monthly subscriptions. By reviewing your statements, you get a clear picture of where your money goes.
Keeping Track of Spending
Your bank statement lists every transaction in order. This is very useful when you are trying to stick to a budget. For example:
- You may find you are spending more than expected on eating out.
- You might notice that a subscription you forgot to cancel is still charging you monthly.
- You can see how much of your income goes to bills versus savings.
When you understand your spending, you can adjust it. Maybe you decide to eat out less, cancel unused subscriptions, or start saving more each month.
Spotting Hidden Fees or Errors
Sometimes banks charge small fees you may not notice, like ATM withdrawal charges or overdraft fees. These might seem minor, but over time they can add up. Regularly checking your statements lets you question any fee you don’t understand.
Helps with Goal Setting
If you’re saving for something big — like a car, a home, or education — your bank statement shows your progress. You can see whether your savings are growing or shrinking and adjust your habits accordingly.
Benefits of This Habit
- Improved Budget Control: Know exactly how much you spend and save.
- Avoid Wasting Money: Cancel forgotten subscriptions and stop unnecessary fees.
- Reach Financial Goals Faster: Adjust spending and increase savings.
How to Make Checking Bank Statements a Habit
Knowing the two reasons is just the start. The real change happens when you turn checking your bank statements into a regular habit. Here are some simple tips:
- Set a Reminder
Mark a day each week or month on your calendar to review your bank statements. Consistency is key. - Use Online Banking or Apps
Most banks offer apps where you can see your account activity instantly. This makes checking faster and easier than waiting for a paper statement. - Look Beyond the Balance
Don’t just look at the total balance. Scroll through every transaction to make sure it’s correct. - Highlight Suspicious Items
If you see a charge you don’t recognize, highlight it and call your bank immediately. - Compare with Your Own Records
Match your statement with your personal budget or expense tracker. This will help you find mistakes or forgotten charges.
Extra Tips to Protect Your Finances
While checking your bank statements is crucial, you can also take a few other steps to stay financially safe:
- Enable Alerts: Most banks allow SMS or email alerts for every transaction. This gives you real-time updates on your account.
- Use Strong Passwords: Protect your online banking with secure passwords and two-factor authentication.
- Keep Personal Information Private: Don’t share your bank details with anyone unless absolutely necessary.
- Update Contact Information: Make sure your bank has your current phone number and email so they can reach you about suspicious activity.
These habits, combined with regular statement checks, create a strong shield around your money.
Why These Two Reasons Are So Important
Both reasons — spotting fraud and managing your budget — work together to protect your financial health. Fraud detection keeps your money safe, while budget management helps you use your money wisely. Together, they give you peace of mind and more financial control.
When you practice this habit regularly, you’ll also become more aware of your overall financial situation. This awareness makes it easier to make smart decisions about saving, spending, and investing.
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Conclusion
It’s clear that reviewing your bank statements is more than just a routine task — it’s a powerful financial habit. When asked to “name two reasons why it is important to check your bank statements on a regular basis,” the answer is simple yet powerful: first, to detect fraud or unauthorized charges quickly; second, to manage your budget and avoid hidden fees.
These two reasons help you stay safe and financially healthy. By turning this into a monthly or weekly habit, you gain control over your money, reduce stress, and move closer to your financial goals with confidence and security.