6 ways to buy checking 'float' time |
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Customize your bill due dates
Are your bills falling at awkward times of the month? If so, call your creditors and request a change, says Liz Pulliam Weston, author
of "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life."
Many creditors -- including credit card companies, mortgage companies and utilities -- are happy to accommodate
you. Some even allow you to choose your due date online.
What strategy works best? Some people prefer to spread their bills out over the month while others like to
line them up when they have the most available cash.
"You've got to look at your own budget and see where your bills are falling," says Weston.
"Most people end up running out of money before they run out of
month," she says. "I think it's easier to group them so you're dealing with bills once or twice a month rather than every week."
Leverage your credit card closing dates
By customizing the due dates of several credit cards, you can buy yourself up to an extra
month before you have to pay for large purchases.
"If you put a transaction on one of your cards right after the closing date, you get extra time before you have
to pay it," Weston says. "That's putting float to work for you."
One warning: Label each credit card with its due date so you don't confuse them. Otherwise, you could be faced
with a bill for that new refrigerator within a week.
Use online banking
Want to put high-speed bank technology to work for you? Bank online. This is your personal control panel on which you can
monitor direct deposits, activate auto-pay, check your balance and eliminate the need for mail float altogether.
"Most people, once they start online banking, they never turn back," says Weston. "They quickly get the
convenience of it."
What about hackers? Weston says with modern encryption, online banking is actually far more secure than
paying by mail.
"We just got used to writing checks, which is probably the least secure payment method other than
cash," she says.
Take advantage of account alerts
Some banks and credit card companies offer customizable electronic reminders that alert you when your balance falls
below a certain amount, when a bill is due or when a major transaction takes place.
You can customize the alerts on their Web site or within your money tracking software (or both) to
receive alerts either on-site, via e-mail or via text message.
"I set them up on the bank and credit card sites," Weston says. "I like their always-on feature. I just
find that I pay more attention when an alert comes through as an e-mail than I do when it pops up in my computer software."
Pad your check register
Here's an old bookkeeping trick, updated for computer banking: In your accounting software, write yourself a virtual check
that guarantees you'll always have that much more in your account than your register shows.
"I keep a 'pad' in my checking account at all times; $100 at least, $500 is better, $1,000 is even better,"
Weston says. "The software allows you to write a phony check. It never actually clears but it's always in the software so
it looks like I have $1,000 less in my checking account than I actually do. That's a way to make sure that I never use
the overdraft protection I have."
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