Putting your financial
house in online order
Getting your finances in shape is a tall order. Faced
with a sea of paper -- bills to be paid, check statements, brokerage
transaction records, mutual fund reports -- most people want to
abandon ship. Instead, look online for help.
Provided that you're comfortable with your PC and
the Web, organizing your finances online can eliminate some financial
drudgery and make the task easier and more convenient. And keeping
track of your finances online offers an added bonus: With your data
online, you'll free up storage space in your house.
So where to start? Most people begin where they have
their money -- their bank.
Almost every bank offers some form of online
banking, from the small community type such as Montana-based
First Security Bank with seven branches to giants such as Bank of
America with 5,700 retail banking offices. Find your bank's Web
site, pick a user name and password and you're good to go.
Almost any financial transaction or bank activity
that you carry out by mail or in person now can be completed online.
Exceptions include check deposits and cash withdrawals. Banks haven't
figured out how to give your PC a cash drawer.
"Twenty-four by seven Internet banking
allows customers to view balances, transfer funds, pay bills, check
past debits and credits, contact the bank, schedule reoccurring
payments -- just about everything that you can do at a branch,"
says Lauren Camner, vice president of investor relations and Web
site manager for Bank United, the largest community bank in Florida.
The primary advantages of online banking are convenience,
ease and speed. You pick when you want to bank. It takes less time
to balance your checkbook online since the automation does all the
calculations for you. And in many cases there's no charge for banking
online; be sure to check your bank's fee policies.
In addition to giving you access to your money, online banking also
makes it easier to disburse your cash via electronic
bill paying. You save time, money on postage (as long as the
bank fee, if any, is minimal) and you can pay bills whenever you
But your bank isn't your only e-payment choice:
- If your bank doesn't offer bill paying or you don't
like its system, use another aggregator. This one-site-to-pay-all-bills
approach does take time to set up, but once it's done, all your
data is in a single, easy-to-access online locale.
- Establish electronic accounts with each of your
creditors. You'll have more control, but you'll need to remember
different passwords, user names and the individual sites' methods
- Set up automatic payments, either through an aggregator
or individually. You won't have to remember to pay the bill with
this option, but the transaction will go through regardless of
whether you've got sufficient funds, so you could end up overdrawn.
- Organize just-in-time payments. Pay each bill yourself
each month. You can make sure you have enough dough in the bank,
but you'll also have to remember to make the payments when they
To help you manage online bill paying, many sites
let you sign up for e-mail alerts to remind you when to pay your
Before you make the leap to online bill paying, find
out what fees are involved. Most individual billers do not charge
for online payments, but some do. Others have different charges
for different customers. For example, Bank United doesn't charge
its signature reserve customers (those who maintain balances in
excess of $5,000) for online bill paying privileges. Customers with
lower balances, however, must pay $5.95 per month for unlimited
If you are unwilling to pay any extra fees, don't
lose heart. Double-check with your financial institution. Sometimes
you can negotiate a waiver or otherwise strike a deal.
Managing other accounts
Similar to banking via the Web, you now can manage your stock, mutual
funds and other financial accounts online.
At a minimum, you can oversee individual accounts
separately. Like electronic bill paying or online banking, this
will require setting up a password and user name and learning how
to navigate the individual site.
The advantages of managing these accounts are similar
to that of banking or electronic bill paying: speed, ease and convenience.
The downside is you have to set up individual accounts, so it can
get complicated. That means multiple passwords for your various
accounts. Plus, you have to know how to navigate each site.
If you choose to manage your business accounts online,
Debbie Stanley, author of "Organize Your Personal Finances
in No Time," recommends recording passwords and user names
in one convenient spot that can be secured. Stanley uses her password-protected
Palm Pilot. Or, just keep a file folder with the required log-in
information. The file folder can be stored in a locked drawer for
the sake of security.
While most of us have to manage each of our business
accounts separately, you may be in luck if you work with a smaller
investment or financial services firm. These companies may be willing
to help you organize your accounts online in exchange for getting
your business and retaining you as a loyal customer.
Atlantic Financial Inc., an independent investment
firm based in the Boston area, aggregates online accounts for its
customers. "An investor who has a few mutual funds at Fidelity,
one at Mainstay, two at ING and one at Dreyfus could consolidate
all these into one account with one account number, Web site login,
password and statement," says firm president Bruce Fenton.
Atlantic Financial does not charge customers for this
service. Fenton says the company offers it because it makes customers
happy and keeps them coming back.
Computer checkbook programs, such those offered by Intuit's Quicken
or Microsoft Money, also can help you organize your online finances.
They've built money management links into their software applications.
With Quicken 2005's checkbook register, for example,
a click will take you to a creditor's Web site for easy bill payment.
In addition, Intuit and Microsoft are adapting their
programs so they can download transactions for your financial accounts.
So rather than recording a check payment yourself, the software
will do it for you by accessing your bank account records online
and transferring transaction information to your computer.
Additional financial management
Feel like you need a little more guidance in handling your money
online? Check out one of the financial "concierge" services,
such as MyVesta.org
Both help you master budgeting with books, articles and templates.
They also offer advice and money coaching.
The basis for Mvelopes is the old-fashioned paper
budgeting method; you use different envelopes, electronic in this
case, to track your spending. In addition to budgeting, Mvelopes
lets you pay bills, manage your financial assets and offers personal
coaching on financial issues.
MyVesta focuses more on debt counseling and management.
Much of its information is free, but there are charges for individual
coaching and products such as its Debt Eliminator Report.
There's the catch. The individual attention is great,
but it does carry a price tag. "You're going to have to pay
for it," says Steve Rhode, money coach and founder of Myvesta.
"Nobody's going to mow your lawn for free, and nobody's going
to take care of your finances for free."
Mvelopes' fees vary, depending on whether you pay
monthly, quarterly or yearly. The cheapest option -- paying in advance
annually -- works out to $9.95 a month. It also offers a free trial
so you can test-drive its financial management services before you
In addition to pure financial sites, people who need
help getting organized may want to check out www.myGoals.com.
Its section on financial goals includes "buying a home"
and "reducing debt."
You can use myGoals templates or create your own money
management list. The site prompts you through the process; for example,
it will ask you to state your goal and then list the obstacles facing
you in meeting it. Mygoals.com will help you divide a big project
into little, achievable goals and set a deadline for each task.
You also can set up myGoals reminders, such as "clip coupons
from Sunday's paper" in your quest to save money.
Some online money management tools have even been
officially sanctioned by state officials. The New Mexico State Treasurer's
Office, for example, has partnered with the national, nonprofit
Bond Market Foundation to make online money management resources
For the New Mexico program, the Bond Market Foundation
created both English
sites. The pages also are accessible from the state treasurer's
page. The sites offer information tailored for women, young
people, Spanish-speaking Americans, American Indians, seniors and
those who have suffered an unexpected change in their lives, such
as the loss of a spouse or a job.
Individual work still required
Going online can be a great way to organize your finances, but it's
not a money magic bullet. You still have to do the work.
"People start online banking thinking it will
make them more financially savvy," says Rhode. "That's
not the case at all. It's just getting your bills paid online."
Going online makes bill paying and record keeping
easier, but it doesn't convey wisdom. In fact, Rhode argues that
going online or using a software money management program can actually
make you less likely to analyze your financial situation. You're
one step further removed from the process. The computer does all
the work, so it's easy to lose track of how much you're actually
paying out in bills vs. how much you are taking in.
That caveat aside, provided you go online with your
eyes open, electronic bill paying and record keeping can ease the
burden of keeping your finances up-to-date and in order.
Jenny C. McCune is a contributing
editor based in Montana.