What is a Bank Statement and Why Is It Important

Even if you look at your bank accounts every day, it's still good to look at your bank statements every month. It's an important tool in keeping track of your spending and keeping yourself on track with saving. Although bank statements can feel a bit archaic, they do give you a great overall look at what's going into and out of your accounts to help you know where you're at so you can reach your financial goals.

What is a Bank Statement

Basically, it's a summary of all transactions that have been made within a specific timeframe, usually one month, and is generally made available around the first of every month. It includes deposits, withdrawals, payments, and transfers. It also provides important details like what your account balance was at the beginning and end of the statement period, any interest you earned or were charged, and any fees you paid and the reason you paid them.

Why is a Bank Statement Important

1. Awareness
   Because your statement is a snapshot in time of your finances, reviewing it on a regular basis helps you understand your spending habits so you can look for patterns and get a clear look at where your money is going. You can't reach your financial goals if you don't know what your habits are and where your money is going!
2. Find errors
   It's not ideal, but things happen sometimes. Your statement can help you catch things like unauthorized or fraudulent transactions, fees you have questions about, or if something just doesn't look quite right. Your bank will work with you to correct any errors or report fraudulent transactions.
3. Budgeting and planning
   Use your statement to help you when creating a budget or spending plan, hold yourself accountable for your spending, and make it much easier to categorize your spending so you know where you tend to spend the most.
4. Proof of transactions
   Your statement can serve as official documentation of transactions, whether you're applying for a loan, doing your taxes, or resolving a billing dispute. Having this record can help streamline the process and is evidence of your financial history.
5. Monitoring financial goals
   Whatever you're saving for, a statement helps you track progress. Plus, when you're looking at your transactions and spending, you can see where you might be able to cut back and save a bit more.
6. Fraud prevention
   Like we mentioned in the point about errors above, regularly looking at your statements can help you spot suspicious activity you might not notice otherwise. Fraud can start with a dollar here or there to see if it goes unnoticed and can quickly get worse, so catching them early and taking action to prevent more fraud is important to protect your identity and your accounts!

WaFd Bank is Here to Help

No question is too small for our friendly bankers! With WaFd Bank you also have access to tools and services to help you manage your finances and get the most from your money. We even offer Free Checking* with no minimum balance or monthly maintenance fees, access to over 40,000 fee-free ATMs, and more! Visit us at your neighborhood branch, give us a call at 800-324-9375, or check out what WaFd online banking has to offer.

*Nonsufficient funds charge may apply.