Final answer:
The claim that bank statements must be reconciled once a year is false; instead, it is recommended to reconcile bank statements monthly to manage finances effectively and avoid overdraft fees.
Step-by-step explanation:
The statement that you need to reconcile your bank statement once every year is false. It is generally recommended to reconcile your bank statement each month to help manage your money effectively. Keeping up to date regularly with your bank reconciliation can prevent errors, keep tabs on your cash flow, and help you avoid overdraft fees associated with insufficient funds. By doing a monthly reconciliation, you can catch any discrepancies between your records and the bank's, ensuring that every transaction is accounted for correctly.
While reconciling your bank statement can seem daunting, using the "read between the lines" approach with blurry numbers can simplify the process, particularly when your records do not match up exactly with the bank's. This method allows you to identify and correct any potential mistakes without getting overwhelmed by the exact cent values. Regular reconciliation is a crucial financial habit for maintaining a healthy financial status.