Why you should check your bank account balance - Every. Single. Day.
It’s Sunday night.
You’re exhausted after a great, but pricey, weekend. There was happy hour on Friday night ($30) followed by dinner with friends ($40) and then dancing ($30). On Saturday, you got coffee and a bagel from your favorite local cafe ($15) before shopping for an upcoming trip ($50).
Now, you’re ready to tuck into some Netflix and takeout when it occurs to you just how much you spent over the last two days. But the Sunday scaries are setting in, and you just don’t feel — as they say — at capacity to see the dent in your checking account. It feels like it could ruin an otherwise pleasant evening.
You get the takeout anyway.
We’ve all been there. Which is to say, we’ve all avoided checking in on our finances, even when we know it would only hurt us to keep our heads buried in the sand. With this in mind, consider this simple solution: Check your bank account every single day.
Okay, hear us out. This might sound intense and stressful — and it certainly may feel that way in the moment. But being armed with information about your finances every single day can be an empowering, money-saving and even fun experience.
The “ostrich effect”
Many of us suffer financially because of something called “information aversion” or “the ostrich effect,” according to Kristen Berman, co-founder of behavioral economics firm Irrational Labs.
It’s simple: Human beings will go to great lengths to avoid hearing bad, stressful, disappointing or hurtful news. A well-studied example of this idea is people’s reluctance to get tested for STDs. According to Berman, there’s a simple reason that explains our propensity to avoid our finances.
“Most Americans have less in their bank accounts than they want,” she says. “Often, logging into our bank account is bad news.”
In other words, we treat financial ignorance as bliss. Even when by doing so, we’re only generating more pain for ourselves down the line when we overdraft our account, can’t pay our bills or feel pinched for money to pay for that upcoming trip.
Adjust your routine
Pick a specific time — Berman suggests first thing in the morning — to check your bank account every day.
Set an alarm on your phone or make a daily calendar event with a link to your bank and login information. The idea is to make checking your bank account a seamless daily routine, like checking the weather or the news. You want it to become a ritual that you don’t have to think or stress out about — it’s just something you do.
Better yet, Berman says, cut out the step of logging in (where you could still get trapped by information aversion) and use an app that will actually text you your bank account balance every day. She uses the personal finance app Digit, which will send you a text every morning with your checking account balance.
Why checking your balance every day works
“Behavioral science shows us that we are what we pay attention to,” says Berman. “If you pay attention to your money, you’ll make choices about it that serve you better.”
If you start each day knowing exactly how much money you have in the bank — and how much you had yesterday — it can trigger different behaviors throughout your day, whether it’s skipping that second cocktail or deciding to pack up the leftover pasta in the fridge instead of buying lunch. The point isn’t to deny yourself pleasure or enjoyment but to prevent self-destructive financial behavior so you can enjoy your money more.
Why you should do it
There are several different payoffs to staying up to date on your finances. Here are a few:
1. Save money
Checking your bank account daily is a money-saver, and not just because you’ll be more mindful about spending. Knowing how much you have on any given day will help prevent account-minimum, overdraft or late penalty fees. You’ll also know if you’re getting close to not having enough for something crucial (looking at you, toilet paper, subway fare and milk) that could force you to have to overdraft or borrow money. That day-to-day awareness also means you’re less likely to miss a fraudulent charge, be overcharged by a vendor or forget to have a friend Venmo that money they owe you.
“The more aware we are of our finances, the more we can avoid those mistakes that cost us extra money, on top of the money we’re afraid we don’t have,” says Berman.
2. Lower stress levels
Checking your bank account a lot sounds stressful. But the reality is that if you’re not checking your account, you are probably already stressed about your money.
“Anytime we avoid anything in our life, it makes the situation or the problem even bigger,” says financial educator Danetha Doe. “It’s the monster under the bed. The longer you don't just pull up the blanket to check, the monster just gets bigger and bigger in your head.”
Avoiding your finances can make pretty much any financial issue you have even worse. And it can also cause your anxiety to balloon to the point where it’s disproportionate to the financial problems you’re afraid of.
3. Growth and self-knowledge
Money is emotional. And our feelings about money can cause us to act in ways that aren’t helpful.
Doe says we’re often more afraid of how that low account balance will make us feel about ourselves than we are about the number itself. She recommends de-coupling money from emotions — it’s much easier to stay on top of your finances if it doesn’t feel like your self-worth is on the line every time you log in to your bank account.
“Getting to the root of our emotions about money is crucial,” says Doe. “Seeing your account balance can bring up shame, anxiety, anger or grief. But if you can figure out what that feeling is really about, you can work through it, so it doesn’t harm you financially.”
4. It can be fun
Closely monitoring your finances isn’t about taking things away from yourself. It’s about helping you enjoy your money more. If you’re spending without thinking, you’re probably not fully enjoying what you buy.
“It can be a fun exercise to ask yourself, ‘How can I spend money in the way that makes me the happiest?’ Then to align your spending with those values,” says Berman. “If you’re avoiding your finances, you miss out on having that talk with yourself. We’re not saying don’t buy a coffee if your coffee shop ritual makes you happy. Please, buy coffee. But if you’re buying five pairs of shoes because shoes make you happy, ask yourself if the fifth pair made you happier than the fourth.”
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