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5 Ways Paperless Personal Finance Saves You Money

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I don’t know how JD comes up with the topics he does but practically every single one resonates with me and this one about pursuing paperless personal finance hit spot on. I only started truly dealing with personal finance issues such as bills, credit cards, and banking within the last four years and I’m pretty much as minimalist in terms of paper as you can probably. I’m so trusting of going paperless because many of the all-electronic processes had proven themselves in the last four years (in terms of earning user trust on their safety and reliability) so I just rolled into it. I think going paperless as much as possible is the way to go.

There are two reasons why you should go paperless: it’s good for the environment and it will save you money. Since most people are interested primarily with saving money and I like it when people try to save the environment, I’ll try to trick you into going paperless for your reasons even though I want you to do it for my reasons (shhh! this tactic is a scecret, don’t tell anyone!). If you want ideas on how to go as paperless as possible, read JD’s post for ideas.

Reason 1: Save On Envelopes & Stamps

Each bill you don’t have to send is one in which you don’t have to stick into an envelope, which usually is provided, and stick a 41 cent stamp on. If you mail off two credit card payments, a mortgage payment, a car payment, a cable payment, and a utility bill each month, that’s $29.52 saved each year in stamps alone. Don’t scoff at the thought that going paperless only saves you thirty bucks in stamps, would you pick up a thirty dollar bill if it were sitting on the ground? I would.

Reason 2: Avoid Fees Because Payment Systems Remember

One of the benefits of getting email notification of a statement is that when you get the email you’re generally at your computer, which means you can log on and schedule a payment. If you get a paper bill, you have to go get your checkbook, write out a check, put it in the envelope with the stub, put a stamp on it, and walk out to your mailbox. There are plenty of opportunities in that process chain to just put the bill down and take care of it later. If you’re online, just log into your account, schedule a payment, and have a nice day until the next notification.

Reason 3: Schedule To Pay At The Last Minute

Keep those hard earned dollars in your bank account until the last moment and have the bank remember when to pay for you. When you log on and schedule the payment, most places will let you pick the day you want to send it. Simply wait until the last day (I generally schedule it three or four days before the last day, just in case… though the just in case has never happened and I’m not really sure what could happen) so your dollars keep earning interest. While I can’t quantify how much money you’ll earn each year, it won’t be much but it’s better you than some company.

Reason 4: Electronic Payments Are Rarely Lost

The USPS processes gazillions of pieces of mail each year and a percentage of those are lost or mangled in processing and O’Doyle’s Law states that all bad stuff happens to you when it will hurt you the most (it doesn’t because I just made up that law but if there is a law for that I don’t know it), so put two and two together and realize that a physical payment is far inferior to an electronic one. With electronic payments, you get confirmation of a successful scheduling or payment almost immediately. If it’s “lost,” you generally know because the next page doesn’t load. When regular mail is lost, you generally know because you get a missed payment fee.

Reason 5: Electronic Theft Is Harder

It takes very little effort to steal your information when you mail a check payment. If you have a traditional mailbox, it just takes someone with enough stones to open up a stranger’s mailbox and snatch the envelope. Once they open it up, they have your name, address, bank name and your checking account number – all off your check. If someone wants to steal your information when you make an electronic payment, it’s impossible because you aren’t sending your bank information with your request every single time. You only register the bank once, it’s never displayed back to you for security reasons (in case you unwittingly give out your credentials to a thief), so they’ll have to somehow catch you when you enter that in and spend eons of time to crack the SSL 128-bit encryption (good luck, read this for more on SSL 128-bit encryption). The Law of Least Resistance says that a thief, given the skills to two both, would rather open your mailbox.

There are probably plenty of other ways that going paperless will save you money either right this moment or in the long run but those are probably the biggest. So even if saving the environment isn’t on the forefront of your mind (though it should be!), save yourself some of the other kind of green by going paperless and everyone wins.

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18 Responses to “5 Ways Paperless Personal Finance Saves You Money”

  1. Josh says:

    I wouldn’t pick up a $30 bill…. It is a fake.

  2. How about the greatest “savings” of all: Your time. Ultimately, financial efficiency is about making more time for pursuits of passion. As Mitch Anthony said, “Life is not about making money, money is about making a life.”

    Cheers…

  3. Dave says:

    Jim, your post today was spot on. I actually changed over all of my banking and brokerage accounts to paperless yesterday. I’ve also filled up two garbage bags full of shredded bank statements, paid bills, etc, which was the real reason I decided to go paperless in the first place (I hope I’ll never have to do it again…). I was wondering if you have looked into ING’s Electric Orange checking account. It seems to me like it might be a good idea, but it concerns me that you cannot have any paper checks. I need them from time to time, even though 99% of my bill pay is electronic.

  4. Hawkmoon Nine says:

    Don’t forget about AutoPay too, not only do you not have to remember to pay, they take the money out on the last day it is due! I think half of my bills are on AutoPay.

  5. Lazy Man says:

    I find that Reason #2 is backwards for me. When I get an e-mail, I’m usually doing something else too busy to be bothered with it at the time. Then it gets forgotten because new e-mails come in and bury it.

    Paper on the other hand is a physical reminder that I need to pay the bill. It doesn’t get buried.

    I know I just need to revamp my system, but I’m not sure how I can get a paper-like results from electronic notification.

  6. mommy says:

    Lazy Man,
    You could do what I do and print out the email (just the first page). That isn’t technically “paperless”, but its a close second.

  7. Having a paperless office/finance system is a tremendous goal (indeed, one I’ve yet to attain).

    DAVE – I support ING’s Orange account (and savings accounts too) — for their strong interest earnings and sound security protocols (customer service proves top quality as well). I rarely use checks however yet their account-to-account transfer system looks direct and simple………Jill F.

  8. Master Allan says:

    Jill – I recently hit the paperless home office/ finance system. Years ago I thought I was truly organized with utility, insurance, and Discover card statements organized into yearly binders (and dozens of binders cluttering up my closets). In the last month everything has been either scanned in (old statements) or re-downloaded as PDFs (more recent). The PDFs are fantastic. With an Adobe search, I can tell you when and how much I spent at Target throughout the year in 2006.

    My finance reports will never fade, never get lost (remember to backup your computer data occasionally) are easily available for reference, and much safer from data theft. Can’t ever see going back to receiving a bill, writing a check, and wasting a stamp.

  9. Ed says:

    You talk about saving 30 bucks a year going paperless. Now what about the 540 dollars per year for broadband? And what about the 1,000 dollars for the computer? And what about the trojans, viruses, worms, rootkits, etc that can hack your every keystroke and send it off to Poland?
    Do you guys ever think things through?

  10. Becki says:

    Answer to Ed,
    I would have the computer ,DSL anway,the firewalls too. It just makes it more reasonable to use it for the paperless option for me,I still get the paper bills,for now,but the only bill I mail now is my mortgage payment,which if they didn’t charge for paying online, I’d use that too.
    My family and friends are everywhere from Alaska to China, so I have the email for keeping in touch. The only worry I have is ,what do you do if your server goes down? I wouldn’t have the paper bills to keep up the payments and to mail payments. Am I the only worrier about this?

  11. Sheila says:

    I went to paperless and using online banking, and there is another advantage that no one has mentioned. I make extra payments to my credit card bill every week to reduce the principal. This is something that I could never do with a paper statement, I could only pay once a month!

    Now I use my credit cards like a debit card, and I make a weekly payment that covers my purchases, and I also add extra to reduce the balance. Easy!

    My credit accounts are at banks with local branches, so if the websites are down, I can make payments at the local branches.

  12. K says:

    So true and yet so many resist this. I did until I was assigned to one of our overseas offices for a year. I got in the habit of paying all my bills online except for two that did not offer that option (I set up auto-pay for them but shame on you M&I Bank and State Farm!!!). Also I never used my debit card for anything. Now I write maybe one check per month (checks are not cheap) and when I need a stamp about once every two months I go into the PO and put 41 cents in the machine.

  13. Randy says:

    I pre-pay small bills like water and garbage 3-6 months at a time if there isn’t an electronic option. Figure that the postage is about the same as the lost interest–then I just trash the statements that still have a negative balance.

  14. dunnright says:

    LazyMan said:
    ——–
    I find that Reason #2 is backwards for me. When I get an e-mail, I’m usually doing something else too busy to be bothered with it at the time. Then it gets forgotten because new e-mails come in and bury it.

    Paper on the other hand is a physical reminder that I need to pay the bill. It doesn’t get buried.

    I know I just need to revamp my system, but I’m not sure how I can get a paper-like results from electronic notification.
    ——–

    I make sure that whenever I get one of these emails, if I AM too busy to make the payment then, I mark the email as “Unread” or wait to read it untill I do have the time.

    I also have several different folders within my email box designated to my different bills.

  15. Dragon Lady says:

    I used to have the same problem with missing paper “pay now!” notices. What I’ve done is make a small reminder that I stick on my desk/cubicle wall/computer (wherever you do your work) that states what bill is due on what day. Two columns: bill on left, date due on right. I use a small post-it sliver to cover over the line with the last paid bill, so I’m always looking at the one that’s due, even if it isn’t due for two weeks. And I “pad” the schedule by a week so I have extra time in case the payee’s server is acting up. (A rarity, but possible.)

    I have the URLS I need on files at work and at home, so I’m not to worried about computer problems. And being able to pay a bill literally the day before it’s due, without that “three days for a check to clear” problem, is worth its weight in gold.

  16. [...] leave your cards lying around, don’t leave your statements lying around (in fact, go the paperless finances route), and treat the credit card as you would [...]

  17. Valerie says:

    @ Lazy Man:
    Do you have Gmail? One of my favorite things about it (besides the unlimited space, threading of conversations, and Google search) is that you can star or categorize emails for follow up later.

    @Dave:
    I just switched to ING’s Electric Orange and really love it so far. They will mail paper checks for you at no charge, and they also offer free “electric checks” for direct person-to-person payments. Granted, some situations still necessitate a paper check on the spot, but I still have some from my B&M bank. Which I keep open “just in case.” :) Also, if you search around, ING is offering a $50 bonus when you sign up for electric orange.

  18. echidnina says:

    I love going paperless and opt in whenever I can. I am truly a child of the digital age, and I love keeping everything electronically. With paper, I’m constantly losing things or having to rush around when I need to dig something up… PDFs and emails keep me organized, since they organize themselves and I can easily sort a load of statements by their date and look back to verify something. Paper takes up space, gets lost, or winds up in the trash.


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