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How to Go Paperless with Your Finances

Posted By Miranda Marquit On 06/01/2011 @ 12:15 pm In Personal Finance | 9 Comments

I’m almost completely paperless with my finances. I just signed up for paperless statements on my husband’s student loans. The only paper statements we’re receiving now are the quarterly car statements, that include three months’ worth in one go, and the IRA statement. I’m in the process of figuring out what I need to do in order to get paperless statements from those last sources, since the idea of paperless finances appeals to me.

Before you jump into the idea of paperless finances, though, you need to think things through. Make sure that you have a plan in place, and that you have a records system that will allow you access to the information that you might need later.

Setting Up An Electronic File

When you decide to go paperless with your finances, it is a good idea to set up an electronic file. You can save the information in a password protected folder on your computer. When you download a bank statement, or some other financial statement, you can save it in this file. This will make it difficult for others to access your financial information.

It is even possible to keep digital copies of receipts [3]. If you have a scanner, you can simple copy the images, and then keep them in your file. You can set up sub-folders inside your electronic file to better organize business expenses, charity expenses, warranty information, and statements. It is a good idea to save this information to a digital file, since some financial institutions may not store your statements for extended periods of time. Protect your electronic financial file from a possible computer crash by backing it up to a flash drive, or some other drive. That way, you won’t lose the information if something happens to your computer.

Protecting Your Financial Data

In addition to protecting your electronic financial file with a password, it is a good idea to make sure that your computer is adequately protected. Keep your anti-virus software up to date, and make sure that your wireless home network is encrypted. It’s best not to look at financial statements and other financial information on public networks; instead, wait until you are somewhere that is a little more secure before you take care of sensitive financial operations.

Going Checkless

I still use checks for utilities that don’t have bill pay [4] set up. But, for the most part, I pay all of my bills electronically. It’s nice to have checks on hand to pay the babysitter, and to pay those utilities that aren’t compatible with bill pay, but I find that I really don’t need paper checks much at all. My mortgage, car payment and student loans are all automatically deducted from my account. I schedule other obligations electronically: Once a month I pay all my bills by scheduling them for a day before the due date.

Going checkless can help you avoid the delays and other issues that can come with snail mail. Indeed, my mother-in-law once had a payment lost in the mail. It caused all sorts of trouble. And don’t forget that it’s easy for identity thieves to steal checks right out of your mailbox. Then they have your account number.

Working toward a paperless financial situation can lead to increased efficiency and convenience — and it can help save the environment and cut costs for banks. Do you think paperless finances are a good idea?

(Photo: featheredtar [5])


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[3] receipts: http://www.bargaineering.com/articles/check-your-receipts.html

[4] bill pay: http://www.bargaineering.com/articles/ten-minute-tip-setup-online-bill-payment.html

[5] featheredtar: http://www.flickr.com/photos/featheredtar/2302651444/sizes/o/

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