News > Capital Markets

Checks and Balances

By Advisor Perspectives
Capital Markets

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I still balance our checkbook every month. I realize that I am in the minority; only a third of Americans use checks regularly and only 20% reconcile their personal ledgers with their bank statements. But I’ve always found the discipline useful. At first, it helped ensure that we remained solvent (which was touch-and-go for a while); today, it keeps me in close touch with trends in revenue and expenses.

Some politicians have drawn parallels between public budgets and household checkbooks, and suggested they be managed in a similar fashion. The comparison is not entirely appropriate: households can’t print money or borrow immense sums at low interest rates. Government incomes and costs don’t have to be aligned every month; such a strategy would be ruinous if pursued during a recession.

Read more at Advisor Perspectives.

Photo: Ken Teegardin

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