Technology Makes Planning Easier
Keeping track of income, expenses, account balances, and liabilities can take time if you don't have a process, and time is something you can't spare. Using the ever-growing technological resources at your fingertips is a key part of creating and implementing a strong financial plan. Many people hesitate to get online for fear their financial information might be stolen. In reality, the information is already available online and is no more or less accessible to thieves simply because you accessed it. Being a savvy Internet user and accessing online tools is the best way to protect yourself. Access to online tools and planning resources puts more power in your hands.
Auto-Pay and Direct Deposit
Setting your money baskets so they receive direct deposit — or, for the smaller baskets, electronic transfers — from your paycheck will save you time going to the bank and waiting for checks to clear. What's more, the ease of managing your money baskets will increase the likelihood that you'll continue to implement your plan and reach your goals. You may already have your paycheck direct-deposited into one or two checking or saving accounts. Take this a step further by calculating how much should be deposited in each money basket, set it up in your next family money meeting, then sit back and relax as the money baskets fund themselves. You can change the amount of your transfers any time, with usually only a day or two advance notice, so there's no fear that you might overcommit and not be able to reverse a transfer.
Take the direct deposit step one level further and arrange to have as many of your bills as possible paid via auto-pay through either your bank or your service provider's credit card payment system. You'll be sure the payment gets made on time — avoiding late fees and boosting your credit rating — and have fewer checks to write.
Fewer and fewer banks are charging for online banking, and virtually every bank does business on the web. In most cases, services are free for all or fees are waived for accounts with direct deposit or a minimum balance. Online banking makes tracking payments and deposits easier. And transactions usually carry more information if you are downloading them into bookkeeping software such as Quicken or MS Money. Online banking saves you the time you'd spend writing and mailing checks, and there are fewer checks to lose or be delayed by mail.
Information-gathering is made easier thanks to web resources called consolidators. These web services — such as Yodlee (
Bookkeeping services such as Quicken, MS Money, and Mvelopes gather information from online and either downloads it into a program that sits on your computer or, in Mvelopes' case, stores it online for access from any computer.
Make sure your passwords are secure. Don't use familiar names or words that someone else could guess. Combine letters and numbers where possible. Don't keep the list of passwords in your wallet, on your computer monitor, or anyplace else where they could be discovered. Try basing them on personal events with the year of the event mixed or reversed.
Don't Expect Perfection
Any technology you use is only as good as your efforts to set it up and maintain it. Don't work without some form of backup and alternate ways to access your account information. Still, the ease of using online systems makes creating a computer-based plan and sharing it with family members much more efficient than having a paper-based system. As long as you remember to back up your information, technology is a tool worth using in your financial plan.