Online, on time: by paying her bills via computer, Nicole Long, becomes more efficient and avoids late fees." (Black Wealth Initiative).
"People hear that I'm in accounting and they assume that everything about my life is well organized," says Long, who lives in Marietta, Georgia. "That's not the case, though; I was beginning to let things slip."
For Long, 30, the wake-up call carne last year when she was late mailing a car payment. "Some of that payment was applied to interest rather than to the principal of the loan, so I was effectively penalized," she says "I didn't want that to happen again."
Long, who does her banking through Bank of America, decided to look into online bill payment to get a better handle on her credit as stipulated in DOFE Principle No. 5. "At first," she recalls, "I was disappointed because the bank's list of vendors did not include some of the companies I pay regularly, such as my mortgage lender. However, there is an `add-a-vendor' feature. Any company that sends out regular statements can be added to the list."
Besides her car and house payments, Long set up a roster of "payees" that includes her credit cards and utilities: phone, gas, and electric. "You have a great deal of flexibility in how you arrange for payments to be made," she says. "For example, I have a $2,400 balance on one credit card that I want to pay off, so I asked for a $100 check to be written every other week. I'll pay off the balance in a year. And, thanks to making payments every two weeks, I'll cut my interest charges. If I had to write checks, I'd never keep up that payment schedule."
As is the case with most online bill-payment services, Long started the process by entering the names, addresses, and phone numbers of the companies she wished to pay. "Once you have the program set up," she says, "adding a new vendor takes just a few minutes. The information you need is all on the bill you receive, and you don't need any special software."
The cost for her service is only a few dollars per month, Long says, and the money she saves on postage offsets some of those fees. "The amount I wind up paying is money well spent because of the convenience and time savings," she asserts, "Now I can pay bills at virtually any time, from my home, my office, or my laptop if I'm on a business trip."
What do experts think of Long's strategy for getting her life in order? Paying bills online can be a "brilliant" way to manage your finances, says John Roberts, vice president and director of wealth management at Denver Investment Advisors. "In addition, electronic bill paying can be coordinated with personal finance software such as Quicken or Microsoft Money. You'll receive a record of your expenses, which will be very helpful in budgeting and tax preparation."
If you want to pay your bills online, here are a few tips:
* PICK THE RIGHT PROVIDER
"See what your own bank has to offer," says Holden Lewis, a reporter for Bankrate.com in North Palm Beach, Florida. "If you're comfortable with your bank, and it has a good online bill-paying service, there's no need to set up a separate bank account for online checking."
If you don't want to use your own bank, Lewis suggests looking into an online bill-payment service. "Using a national service," he says, "may take it simpler to add new companies that you wish to pay. Also, if you think you might be switching banks in the future, it may be easier to do so if you're paying bills through a third-party service."
* CHECK THE COASTS
Some banks offer free online bill paying if you keep large accounts there." says Lewis. "Otherwise, you might be charged $5 or $6 a month. In some cases, though, that fee entitles you to only a certain number of paid bills a month, after which you'll pay extra. You should know the teams before you sign up."
* CONFIRM THE SCHEDULE
Most online bill payments take a day or two, says Lydia, Sheckels, chief investment officer at the Philadelphia-based Wescott Financial Advisory Group, but the wait can be as long as five days. "Keep track of your payments and the e-mail confirmations you receive. This will let you know how long it takes for your payments to go through, and you can schedule your payments to meet the deadlines. In addition, you can print out the confirmations for your records."
* STAY FOCUSED
Don't think paying your bills online will solve all your money management problems. "Just as you can forget to write you can forget to go online to pay your bills," says Sheckels. "You still need discipline."
RELATED ARTICLE: Declaration of Financial Empowerment
From this day forward, I declare my vigilant and lifelong commitment to financial empowerment. I pledge the following:
1 To save and invest 10% to 15% of my after-tax income
2 To be a proactive and informed investor
3 To be a disciplined and knowledgeable consumer
4 To measure my personal wealth by net worth, not income
5 To engage in sound budget, credit, and tax management practices
6 To teach business and financial principles to my children
7 To use a portion of my personal wealth to strengthen my community
8 To support the creation and growth of profitable, competitive, black-owned enterprises
9 To maximize my earning power through a commitment to career development, technological literacy, and professional excellence
10 To ensure that my wealth is passed on to future generations
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|Author:||Korn, Donald Jay|
|Article Type:||Brief Article|
|Date:||Jul 1, 2002|
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