Tips for Using Bill Pay Services

I have been using the free bill pay service through my credit union for the past 3 years. I always promised myself that I would begin to use the bill pay service once the per transaction price went below the price of a stamp. To make a long story short, I haven't written out a check to pay a bill in about 3 years.

A bill pay service allows your bank (or third-party service) to debit your checking account and either electronically send payment or write and mail the check on your behalf to the creditor. There are a few things that you must be aware of when using any bill pay service.

When setting up your creditors, be sure to triple check that you typed in the correct account number and remittance address.

This is extremely important. If you enter the wrong account number, your account will not be credited correctly and you risk being charged a late fee. This happened my father. My father typed in this Verizon account number incorrectly (he was off by 1 number) and you don't even want to know what he had to go through to correct it. This is probably due to the fact that Verizon customer service representatives aren't the sharpest tools in the shed. The problem is that you don't find out that there was a problem until the following month's bill comes. If you move and will be using the same utilities companies (water, electric, gas), be sure to CHANGE the account numbers with your bill pay service. I ran into this problem back in April. I received my first water bill and promptly paid it via bill pay. 3 months later (that is how often I am billed for water service) I received my second bill. At first glance, it appeared very high. After further review, I realized that my last payment was never posted to my account and I was charged a late payment fee. I immediately went to the computer, checked my bank records and found proof of payment. While I was on the phone with the water company, I realized that my account number had been changed. I just assumed that that the account number would follow me. Silly me. Thankfully, the water company had record of the payment being posted to the old and currently closed account and credited my new account along with the reversing the late fee.

Always schedule your bills to be paid one week earlier than the due date.

A lot of people that I talk to are concerned about the bank paying the bills late. The fact of the matter is that you tell the bank when the bill is due. They then debit your account a few days before and send off payment. As we all know, the creditors out there don't post payments as quickly as we would like. If you tell the bank that your bills are due one week before they actually are, there shouldn't be a problem.

There is no need to pay for bill pay service.

Many banks toady offer a free bill pay service, especially the credit unions. Start by asking your bank if there is a fee. You may be surprised. Seek and you will find. Ask and you shall receive.

Use the Automatic Bill Pay option.

The automatic bill pay option allows you to pay those recurring bills each and every month without having to think about it. Be careful though. Make sure that you remember the recurring payment and that you have enough money in the bank to cover it. Here is a Weekly Budget Spreadsheet to help you with this. Some bills that are usually recurring... mortgage/rent, credit cards, student loans & automobile loans.

Money Songs

Driving to work today I heard the song "Money Talks" by AC/DC. It got me to thinking how many songs are out there that are about money. Off the top of my head, I have thought of 6. I know if I actually sit down and think about it I would be able to come up with more but This is a good start. If you want, you can blog an entry about it in your own blog and leave the link in the comments section (please link to this entry within your blog) or if you don't have a blog, you can just list some more in the comment section. I will periodically update the list as more and more songs come in. Have fun!

MONEY SONGS - as of 2/15/07

• Money Talks - AC/DC
• Money - Pink Floyd
• Money for Nothing - Dire Straights
• Money, Money, Money - ABBA
• Put Your Money Where Your Mouth Is - Jet
• Take the Money and Run - Steve Miller Band

Amex Blue Cash

In my never ending search for a cash back credit card, I came across the Amex Blue Cash Card. Since I am already part of the Amex family (I have the Costco Card), I was able to apply and be approved through their website in less than 1 minute! Since they already have all of my info, they just needed me to confirm my birth date, telephone number & annual salary. I should receive my card within 10 days.

I will be able to make over $100 cash back this year just by purchasing gasoline alone. If I can get my wife to use this card rather than cash at the supermarket, I would be getting another $300 cash back. She is hesitant to using the credit card at the supermarket. She told me that she doesn't trust herself to stick to the budget when she doesn't have the cash. I have to admit that it would probably be easy to overspend when you don't have a limited amount of cash stuck inside an envelope when you go to the store. I am sure that with a little prodding she will be able to do it. $300 is a lot of money to leave on the table.

Weekly Budget Spreadsheet

I have just published at mock Weekly Budget Spreadsheet on Google Spreadsheets that I use. This is not the exact spreadsheet that I use but it has the basic principles that I have incorporated into the actual one. For example, my personal spreadsheet is full of colors and includes some other line items. In the future I will update this spreadsheet to reflect the actuall look of mine.

Please note that the numbers used in this spreadsheet are completely made up and it assumes that I am being paid weekly.

As you will see, I budget on a weekly basis. I find it easier to control my money on a weekly rather than on a monthly basis. This allows me to tweak the budget when needed each week.

One thing you will notice is that I have assumed that there are only 4 Saturdays (this is the day that I work on my budget each week) in each month. If you look a a calander, you will notice that there are 4 months that acutally have 5 Saturdays. This year those months will be March, June, September & December. Since I am paying my monthly bills based upon a 4 week month, I will essentially be earning an "extra" paycheck 4 times during the year. If you are paid every other week, you would want to divide your bills by 2. You would then have 2 "extra" pay periods per year. If you are paid monthly (I was actually paid monthly while I was a teacher in North Carolina...what a pain in the butt!) then you know what to do.

You can do whatever you want with your "extra" paychecks. Sometimes I put them towards my debt reduction and other times I use them for larger items that I need such as home improvements. Once in a while I will just blow the money and have fun. It all depends on how I am feeling and what is happening in my life at that time.

Should you have any questions regarding this spreadsheet, you can post them as comments and I will reply as soon as I can. I hope you enjoy.

What's in My Wallet?

I came across a post in Free Money Finance Blog about what is carried in wallets. Here is what I have in my wallet right at this moment in no particular order. Acutally it is more of a card holder/money clip less the money because I never carry my wallet and my money in the same pocket.

1. PBA Card & badge
2. American Express Platinum Costco Card - I earn Costco cash each year by paying cable, phone, internet, cellular, heating oil & other assorted bills.
3. Bank Debit Card
4. 2 bank id cards
5. Nissan Roadside Assistance Card - for those time when my automobile acts up which is not very often thank goodness.
6. Dave & Buster's Rechargeable Power Card - for those of you who aren't familiar with D&B, it is pretty much an adult acade/bar/restaurant - very fun place!
7. Dental Insurance Card - Keeping the pearly whites white.
8. Library Card
9. Costco Membership Card
10. Driver's License
11. Health Insurance Card
12. AAA Card - I travel about 60 miles one way for work each day!
13. Waldbaum's Bonus Card - a supermarket discount card
14. A Good Luck Dad Coin given to me by my 2 children about 3 or 4 years ago.

That's about it. Hope you enjoyed the list. Feel free to list the contents of your wallet and compare.

Money Bloggers & their Favorite Movies...

After reading a post at mdmproofing.com, I have decided to post my 5 favorite movies as well. Why I am doing this, I do not know. It just caught my attention...

Here they are in no particular order...

1. Goodfellas..."As far back as I could remember, I always wanted to be a gangster.'
2. Shawshank Redemption..."His first night in the joint, Andy Dufresne cost me two packs of cigarettes. He never made a sound."
3. Rounders..."Listen, here's the thing. If you can't spot the sucker in the first half hour at the table, then you are the sucker."
4. Caddy Shack..."Hey everybody, we're all gonna get laid!"
5. Better Off Dead..."This is pure snow! It's everywhere! Have you any idea of what the street value of this mountain is?"

You can check out what mdmproofing has to say here.

$325 Milky Way

Since starting to watch my spending I have realized that I spend an awful lot of money on the chocolatly goodnes named Milky Way. I have fallen into the habit of purchasing one every working day at lunchtime. Here is the math:

1 Milky Way ($1.25) x 5 day work week = $6.25 per week
52 week year x $6.25 per week = $325!

I guess it would be good for my wallet and my body to stop this little indulgence. I figure that I could if I could stop eating these candy bars, I could purchase a $20 roll of the new Presidential Coins that I want to start collecting per month and actually have something to show for my money besides a belly!

Will the $1 coin ever catch on?

Here is an article that says that Amerians are not really interested in the $1 coins: http://biz.yahoo.com/ap/070211/money_ap_poll.html?.v=7

I like them from a collectors point of view. I, however, wouldn't want the US government to get rid of the paper dollar. It is much easier to carry and handle 20 $1 bills rather than carry 20 $1 coins. We would all look like the teens of today with our pants hanging around our hips. They would have to rename the "plumber's crack" and make it the "money crack"!

The mint is going to start circulating a new $1 coin commemerating the US Presidents starting this Thursday. For more information, you can go to http://www.usmint.gov/mint_programs/$1coin/

I plan on collecting these coins for fun and not for use. Just like Susan B. Anthony and Sacagawea, these coins will probably only see the light of day as change from the stamp machine in the local Post Office.

Good with my Money???

In an effort to organize my thoughts and finances, I have decided to record them here at Watch the Pennies..

People have always told me that I am good with money. Can you be considered good with money when you have the following debts?

1. $15,000 - Student Loan
2. $20,000 - Car Loan
3. $15,000 - Credit Card Balance

I don't think so. Maybe I am being too hard on myself. I have never had a late payment. I have never defaulted on any debt. No... I still don't think that I have been good with my money.

The one thing that I do have going for me is something that my father did for me when I first started to have income and expenses. He set me up on a simple budget that I still use today, almost 20 years later. I feel that this is a very simple budgeting system that I am on. It is similar to the famous envelope system. Instead of budgeting monthly, I budget weekly. I take all of my monthly expenses and divide them by 4 (I get paid weekly). This will let me know how much I need to sock away each pay period in order to pay the bills at the end of the month. By using this system, there will be 4 "extra" pay periods throughout the year. This is how I came up with that...

4 pay periods per month multiplied by 12 months (4 x 12 = 48)

Since there are 52 weeks in every year, 52 - 48 = 4

These four "extra" pay periods for me this year are in March, June, September and December. I base my weekly pay periods by Saturday because this is the day of the week that I budget my paycheck and do all of my banking.

Now what can I do with this "extra" money? Anything that I want! Sometimes I will just use it as "fun money" and go to hell with myself. Dinner, movies, vacations... Usually I will put it towards my reducing my debt.

I have tried to budget monthly but it just doesn't work for me. I figure that since I am living paycheck to paycheck, I might as well budget that way to. Budgeting this way I know that the money will be there when I need it.

Here is a list of the budgeting categories that I currently use.

1. Mortgage
2. Student Loan
3. Car Loan
4. Credit Card #1
5. Credit Card #2
6. Cable/Internet/Phone (package deal)
7. Cell Phones (going to change plan soon...too expensive)
8. Car Insurance
9. Newspaper Delivery
10. Electric
11. Water
12. Oil
13. Food Shopping
14. Gas
15. Spending Money
16. Gifts (birthdays & such)

I realize that I could use more categories such as clothing and home repairs but I can take care of those with those "extra" pay periods that I spoke of earlier. Later this week (tonight if I get a chance) I will create and post a link to a Google spreadsheet showing my budget.