But Jared, what makes online banking so great? I’m glad you asked. Let me explain by telling you what I use my banks’ online services for.
After my paycheck is direct deposited into my savings and checking accounts, I can view my balances right here on my computer. No going to the bank, no phone calls to bankers who want to sell me things I don’t need and no trying to find an ATM to pay a fee to check my balances for me. I have all my money on my screen in seconds. I’m also never a more than few clicks away from knowing where my money has gone, what checks have cleared, what checks I have received and what I still need to pay. It’s basically my personal accountant. I don’t keep bank statements, old checks or any paperwork and get this; I have never once in my life used a register book. Never. I have never had to balance a checkbook. Why should I have to balance ANYTHING? I’m not a trained seal, I’m a guy, and not even a trained one at that! The bank keeps all those records for me, that’s what I pay them for, that’s what the fees and interest they earn on my money are for.
I also have them pay my bills for me. For free. I never miss a payment to a credit card, I never get hit with late fees, my phone doesn’t get turned off because I forgot to pay the bill.
Here’s how it works. You use your banks’ bill pay service to set up payee information. This is usually the name of the company you want to send a payment to which is often referred to as a debtor. Then your account number for that company such as credit card number or customer ID number. Then the payment address of the company, which should be the place you normally send your payments by mail (sometimes a P.O. Box) And finally a phone number they can be reached at. I always give whatever number that I would call for customer service.
Go to the page to make a payment. Go to the name of the company you wish to send a payment to and enter the amount you owe or wish to pay. Click send. Your bill will now be paid and taken directly from your bank account, normally within 24 hours on a business day.
You can set up payments to be made automatically on a certain day of the month or you can choose to make them manually when ever you want. Once you set up an account it’s in there for good, so paying takes a few seconds from that point on. I for one have “balanced billing” on my utilities accounts, so I owe the same amount for 11 months out of the year. I have those accounts set to be paid automatically the first of every month so I never have to worry about it. When I had credit card debt, I set up automatic payments for the seventh of every month (due dates are the 18th) for my normal payments plus $20. I went in and paid them manually every moth and canceled the auto-payment, but if I ever forgot, It was paid anyway and there was no chance for a late fee or damage to my credit.
Every bank has it’s own services and not all banks offer all of them, at least not for free like mine does. Look into you banks’ online features carefully before using them and know what your doing before automating your bills. Most importantly, make sure that if you choose to use these features as I have, that your income and deposits to these accounts outweigh the amount leaving the accounts every month by a healthy margin. Seems like common sense but it can get away from you fast and you’ll get hit with fees like crazy.
Remember, your finances can be made automated, but NEVER lose grip on them. Check in to your accounts often and always know whats going in and out. In this case knowledge IS the real power.
Next post: Now you control your money, time to tackle your debts!
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