What should you do first when reconciling your bank account?

When reconciling your bank account, the first step should be to review your previous bank statement. This statement provides a detailed record of your account activity for the prior period, including deposits, withdrawals, fees, and any interest earned. By examining this document, you can establish a baseline for what transactions should appear in your current balance.

Starting with the previous bank statement allows you to verify that all listed transactions are accounted for in your records, making it easier to identify any discrepancies. It serves as a crucial reference point for the accuracy of both your bank's records and your own.

While gathering receipts and checking pending transactions are important steps, they are more effective and easier to manage once you have a clear understanding of your bank statement's contents. Calculating monthly expenses is also essential for overall financial management but is not directly related to the initial reconciliation process.