Turf_Hacker wrote:I also reconcile every 3 days or so. Makes it quick and easy, and I catch any errors (usually transactions I missed entering) quickly.
It's largely a matter of materiality. I reconcile my checking accounts and credit cards monthly, to the statements. I reconcile my savings accounts whenever I look at the online balance. I count my cash every few days and reconcile to the physical cash on the days I count. Why the discrepancy?
Checking and credit cards are active accounts, but I make very few data entry errors on these. Reconciling monthly works. I've gone as long as 4 months forgetting to reconcile the most active checking account, because I don't get paper statements as a reminder. [Less than ideal work flow: email tells me statement is available. I'm busy, I'll deal with it later. A month later another email tells me statement is available. Eventually I print out the statements since last reconciliation and reconcile.] But my checking account has reconciled without errors every time.
Reconciliation is part of my payment process for the credit cards. I reconcile to the statement, then I schedule payment in full. Once in a while I find an error, typically that I recorded a charge on the wrong card. Less than once a year, I find a merchant error; I think the last one was a restaurant that made an apparent typo in the tip I meant to add on. (For $0.20, I'm not going back to try to change it.)
Savings accounts are low activity. The most common transactions are scheduled deposits (automated at the credit union, scheduled in YNAB) and interest (which I know from the online display.) When I go online to get the interest, I reconcile to the last online balance as a matter of convenience because I'm already there.
Cash is where there can be errors. I can lose change, find change, record things wrong, or get the wrong change back without noticing. So it needs reconciliation most frequently. My practice when the physical cash doesn't match the YNAB register is to enter a balance adjustment with the category of Fun Money. This gives me an incentive to track my cash accurately. The incentive works so well that my typical balance adjustment is a small inflow representing found change.
My recommendation: Frequency of reconciliation should be driven by your details. A high volume account, or an account with a higher chance of errors, should be reconciled frequently. A low volume account, or an account with low chance of errors, does not need to be reconciled more often than a statement is received.