Thursday, January 14, 2010

Make It. Online banking [A budget].

Lauren Williams: I'm not going to lie. I have some really strong feelings about online banking, leaning toward the I-hate-it attitude. I had one bad experience, but really that's all it takes for me. I had a brief stint as an online banker, but got locked out of my account and forgot my passwords (why do we have to have so many passwords in life, anyway?). I have never used it again.

Heather, I know you are a sworn online banker. Why do you like it so much?

Heather Robertson: I guess I'm just a product of the modern age. Every aspect of my life has some internet integration--socially, professionally, academically, and it just seems natural that it would extend to my finances. I totally don't even think about it. What seems more ridiculous to me is balancing a checkbook. Just like with everything else, if I weren't able to instantly connect to my bank account, I would feel out of the loop with what was happening with my money. No matter how well I keep track of it mentally or on paper, the proof of what is actually in there is a few secure clicks away.

LW: The one time I got locked out of my account, there was some "Site Key" feature my bank used to make your account safer. I chose what the site key was and what it was named, but when I went to log in, the website wouldn't recognize my site key. It was terrible. I spent endless hours trying to get in, on the phone with useless customer service representatives. I ended up being late on a bill, and swore paper statements and bills were the only way to go.

How does online banking better help you budget your cash?

HR: With instant access to my money, I can take instant action--at any moment from any place. With my phone, no computer is even necessary, and certainly no the bank with it's lame hours and lamer lines. This means I can check my funds and immediately transfer money if it looks like it's getting low. I can also see the exact moment a payment goes through and when a check clears. It gives me a better picture of how I'm spending.

Also, with online bill pay, my payment is always on time, paid in full. Even though I mentally know that if it's the 20th my account is going to be $100 lighter, I don't really have to remember to do anything. There's no running to the post office with a check at the last minute and then hoping the company gets it on time--I can see it in my account as soon as they receive my payment. This is also useful for checking up on all transactions made online. Thirty seconds after I buy plane tickets, I can make sure that Jet Blue has charged my account--and only once.

LW: I definitely can appreciate the whole immediate-response feature with online banking. It's really terrible waiting around to get a statement, but at least you have a physical copy of your banking history. Paperless bill pay, though? Never again.

HR: I actually have gone paperless for all my statements and bills. It's not like I ever really looked at them anyway, since I already had all the info way in advance of their arriving. However, there is still the issue of accountability. Even with direct deposit and automatic bill pay, my finances won't run themselves. I am still responsible for my money--where it is going, the accuracy of the payment, and making sure it gets there on time.

Watch out for bills that could potentially change from month to month--like your phone bill. Don't let an outrageous bill escape you until you're literally a day late and a dollar short.

And always pay attention to the terms of recurring payments--do they expire? My Discover card payment schedule had to be reset after a year.

One final tip: I have the same password for all my financial accounts. It's a real doozy and totally different from all my other accounts (i.e. Facebook). But because it's the same for everything, I will never forget it and I don't have to write it down anywhere. I also make sure to never let Firefox remember my password when logging into my bank account, even on my laptop.

-- Lauren Williams & Heather Robertson

Photo credit: Secure online banking

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