What to do when your account balance is different than expected

Infinity pool

Balancing your household budget might be difficult to do, but it’s not complex. You just make sure that the money you have going out is the same amount that is coming in. (In this way, Charles Dickens’ Micawber was only half-right, though we agree in spirit.)

In this way, the money you have in your bank account at the beginning of the month should (if everything is done right) be the same at the end on the month. (I call this amount of money “float“.)

Now, as I’ve talked about before, certain activities might post in one month but happen in another month, so you can’t just open your account on the first of the month and see what your float is. Luckily, there’s a way to figure out your account balance even in this case.

But what happens when you do all this and there’s a discrepancy? What happens when you expect your balance to be more (or less) than what it turns out to be?

I mean, $25 dollars here and there are just rounding errors. But what if you’re a few hundred dollars off?

I encountered this situation recently with someone I was working with, and I have some thoughts.

Steps to try

  • Recalculate. Add up your income, your bills, and especially your expenses again. Check your work. Most often this is a issue of omission, where a bill or expense wasn’t accounted for, or one was different than expected. (Think: Was there a big cash purchase that didn’t show up on your account statement? Anything else happen “under the table”?)
  • Recheck the previous month. If you are off by $200 off this month, it’s very possible that the previous month, you could have been off $200 in the opposite direction. This could mean that something was counted in the wrong month, which is very easy to do.
  • Wait for the next month. Similar to the above. If your last month adds up fine, but this month doesn’t, perhaps next month won’t add up too, but in the opposite way.

Is this only a one-time error?

I will admit that this situation is frustrating. I’m a math person, and when I can’t get the numbers to add up, I don’t like it.

But let’s keep the larger picture in mind here:

  • If this only happens once, it’s not the end of the world. Just like when you go over budget (which oh boy have I done), you move forward as best you can and try to make sure that it doesn’t happen again. So time to be more focused and keep track of everything—yes everything—that happens with your money.
  • Focus on the real amounts. Yes, your “theoretical” end of month account statement might be off. But how much do you actually have in your account now? Is it drastically different than what it should be? Don’t get too focused on math.
  • Only worry if there is a systematic drift. The only time you need to be concerned is if you consistently are off in your tally. This could indicate a misunderstanding of what’s going on in your account balances.
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You can get help

If you’re concerned that your money is coming or going in a way that you don’t fully understand or don’t feel like you can control, I’d highly recommend speaking with a professional about it. Since controlling your personal budget is the single most powerful way you can affect your financial position, this is important to get right. Send me a message and I can help you.

But enough about me. Have you ever uncovered a big discrepancy in your account? What did you find?

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