Money Saving Tips: Save Money Yourself

Here's an article from Yahoo Finance that highlights several programs companies have to "help" you save money. But the author says that you don't need this help and that you can simply save the money yourself.

Her thoughts on how to save:

• Divide your monthly mortgage payment by 12. Add that amount to your monthly payment. Enroll -- for free -- in the mortgage company's automatic debit program, and have the payment taken directly from your checking account. Instruct the company to apply the extra money in each monthly payment to your principal.
• Open a savings account at one of the online internet banks, such as Emigrantdirect, which currently pays 4.5 percent interest on new accounts. Instruct the bank to automatically withdraw $100 a month from your checking. Meanwhile, pay for your bagel and other expenses with cash, and throw your change in a jar every night. Every few months, deposit the change in your checking account and transfer it to your online savings. This method guarantees that your nest egg will add up to more than spare change over time.
• It takes all of 15 minutes to set up online bill pay at the bank where you do your checking. I pay a dozen different bills online, saving roughly $45 a year in stamps, and never incur late fees. Be sure to choose a bank that provides this service for free.

My thoughts:

1. I like the mortgage idea. We did something similar, but just added extra principal payments to our monthly payment. We're now mortgage-free.

2. I do this. I have an amount automatically deducted from my checking account and put into investment accounts. I'm looking at increasing the amount transferred later this month.

3. I still don't do online bill pay. For me, it's more of a security issue. Yes, I know that security can be just as bad (or worse) through the mail, but I guess I don't buy into that (if you're careful with your mail, that is).

Comments

[Cathy]

I kind of share your concern about the security of online banking, but I don't quite understand why you're willing to bank online but not pay bills. I've been hesitant myself but am about to take the plunge with online bill pay. I think it will save me about $25 per year (I already save on stamps by paying online with a credit card (miles!) and automatic payments).

[FMF]

For some reason (maybe unfounded) I think that a bank will have more security online than say a utility company.

[William Tanksley]

About bank security versus utility security: the utility company already has all of your financial information on their computers. You using online payment doesn't change how vulnerable their computers are.

By the way, here's another idea I've seen for paying off debts early: many people are paid once every two weeks. If you're one of those, build your monthly budget around two paychecks a month. The trick: some months you get three paychecks! Whenever one of those months rolls around, don't wait -- take ALL the net pay and use it to pay down the debt. You'll never miss it.

52 weeks/year * / 12 months/year = 4.333 weeks/month. That's one extra paycheck for every six months!

-Billy

[FreeTheCow]

I am an IT consultant. A few years ago, we did a banking project to handle paper checks. Eventually, all checks have to be turned into electronic formats and transfered among banks as digital format. Using online billpay actually eliminated that step and you would have one less paper format of your personal information laying around. Yes, I agree that there is security concern between your personal computer to the bank system, i.e. someone may intercept your info if you use wireless. That's probably why I still use a wire when doing all financial related work.