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.