My Paperless Personal Finance System: A Work in Progress
Published on - May 20th, 2008 (by J.D. Roth) 
Last summer, as a part of my quest to get rid of clutter, I began to move toward paperless personal finance. I had planned to share my system only once I’d perfected it, but yesterday Daniel e-mailed to ask for a glimpse of its current state.
To go paperless, you might need a scanner (or some other way to convert your documents to digital files). I also recommend using a shredder to dispose of paperwork. (A shredder is one of the best defenses against identity theft.) Here’s how my current paperless personal finance system works after nine months of trial-and-error.
Handling income
Having your employer electronically deposit your paycheck for you is the first step in going paperless. This wasn’t an option for me at the box factory. Now, however, I have each of my sources of blog income automatically deposited to my business checking account. This reduces the risk of mail and identity theft, and saves me the hassle of running to the bank.
This business account adds a layer of complexity to my finances, but because I’ve automated everything, it’s not too bothersome. Most of my income sits in business checking for months on end. I make quarterly estimated tax payments from this account (a process that is not automated), and retain some of the rest for other business expenses (read: more taxes at the end of the year). Once per month, I transfer a “paycheck” to my personal checking account at the local credit union. This amount is roughly equal to my former income at the box factory.
Juggling accounts
Most of my “paycheck” remains in checking, from which it is automatically transferred to various monthly bills. (The only bill I still pay by check is the mortgage. The mortgage company wants $11 for an electronic transfer. I’d rather pay 42 cents for a stamp.) The rest of my money is divided among three savings accounts:
- My ING Direct emergency fund
- My Mini Cooper account (at the credit union)
- My vacation fund (at the credit union)
I don’t like having my accounts spread around, if only among two banks. Based on suggestions from GRS readers, I plan to move all my savings to subaccounts at ING Direct, but keep my checking account at the credit union. (I will document this process for an upcoming entry.) Besides, ING Direct pays 3.00% interest; my credit union is currently paying 0.35%!
Paying bills
Except for the mortgage, I’ve set up electronic statements and payments for all my bills. Every month, I receive an e-mail notice from each company that my statement is ready. I verify that the bill is correct. If I were to find an error (none so far), I would cancel the scheduled electronic payment and contact the company to correct the problem.
Most of my bills are set to be paid automatically. I’m wary of my credit card company, however, so I process that by hand every month. I simply log in to the bank’s web site, verify the totals, and then initiate a payment.
Processing paperwork
Using this system means I deal with a lot less paper than I used to, but I still receive certain bills and statements by mail because the companies don’t offer any other option. Plus I accumulate the normal receipts through day-to-day living.
I keep most receipts only until I’m sure the bank or credit card has processed the transaction correctly. (Others — for an appliance, for example — I keep on file.)
When I receive any other paper item, such as a bank statement, I immediately scan it and convert it to PDF. Based on reader recommendation, I use the Fujitsu ScanSnap S510M document scanner (Windows version). This is not a frugal option, but it’s damn efficient. The ScanSnap looks and feels like an inkjet printer, but it scans paper quickly and accurately, automatically converting the documents to PDF. (You may be better off using your existing scanner, if you have one.)
After scanning, I shred the original document. I name the PDF something sensible (“200805 – Mortgage.pdf”, for example), and then save it to a pre-set folder. This part of the system is key, actually. Without care, a digital filing system can become just as cluttered as a paper system. It took me several months, but I’ve created a naming convention that works for me.
My hard drive is backed up daily, so I’m not worried about data loss due to computer failure. I would like to create off-site backups, however, so I intend to look at Shoeboxed, a free online tool for receipt storage.
Reconciling statements
Every weekend, I reconcile my accounts. I use Quicken to download data from my banks and my credit card company. I verify that the information is correct, and then think about upcoming expenses. If I believe I can afford to, I transfer money from my personal checking account to one or more of my savings accounts. (I hope to move another big chunk to my emergency fund in the next week!)
I still suspect that one day I will move to a web-based tool like Wesabe or Mint or Quicken Online, but for now I’m happy with Quicken.
My impressions
Looking at this system, it’s clear that I’ve come a long way in the past year. I’m moving closer to the paperless personal finance system I described in August. Instead of retaining a shoebox full of paper every six weeks, I’m now filing just a few pages. After using these techniques for the past few months, I’m very happy with them. They’ve helped me to reduce clutter and save time.
My system isn’t perfect, though. I need to move all my savings accounts to ING Direct. Since registering a couple of business names last winter, the junk mail has picked up again — I need to put a stop to that. And I need to find out if there’s a way to pay my mortgage electronically without paying $11 per month.
Have you moved to a paperless personal finance system? Have you taken steps to automate your finances? How do you keep things organized? How do you manage all of the files and PDFs? Are you worried about data loss?
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Couldn’t you just pay your mortgage with an electronic payment from ING? Or does the credit union charge for incoming electronic payments as well?
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WRT your mortgage payment.
Bill pay at my credit union has an option where you can schedule a physical check to be sent out from the bank. And you can further specify that this is done automatically at a given interval (Say, monthly). They do not charge you for a stamp or postage.
I use this to pay for my rent monthly. It’s quite complicated but it’s all automated:
1) 5 days before rent is due my portion of the rent is transferred from savings to checking automatically.
2) My fiance, who is at the same bank, transfers her portion of the rent into my account, again scheduled monthly.
3) 4 days before rent is due, my bank sends a check to my landlord with a memo I’ve specified.
Now that we’ve got it set up, it’s great, and we never have to scramble around rent time.
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Interesting question, John. I’ve only tried to pay the mortgage via the mortgage company’s web site, where they want $11 to do so. I never considered doing it from ING Direct. I’ll have to look into that. My concern is our extra principal payment. We currently pay a few hundred dollars extra per month. I’m not sure how we’d be able to designate that with a “push” transaction. But it’s certainly worth exploring!
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Red, does it cost you anything to use Bill Pay at your credit union? Mine charges $5/month, so I haven’t signed up. I’ve been using “pull” transactions from the cable company, phone company, etc…
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With the exception of my mortgage payment and condo fee payment everything else is paid online.
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You shouldn’t have any problem doing a bigger payment. I currently do that with my mortgage and any extra is automatically applied to the principal.
It’s amazing what these mortgage companies can get away with when it comes to fees. Especially when it makes it easier for them…
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$5/month? Wow. My credit union offers a free bill pay option (usually electronic) which we use for our mortgage.
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I have finally gone completely paperless. My bank offers free bill pay, so that’s how I pay my mortgage and infrequent medical bills, and the rest I use the “pull” method. I enter all payments into an excel spreadsheet the day I make them, and then wait for them to clear before reconciling to Quicken.
As a former banker, I am not at all worried about data loss. This information is backed up on multiple servers and must be kept on file for 2-7 years (depending on the account type).
Now I just wish that all of the places I do business with would go to paperless billing and statement systems. I really hate getting paper bills in the mail.
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@John
ING doesn’t allow you to do billpay. You can only do money transfers with between approved checking/savings accounts.
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I’m fairly paperless as well. I use ING checking and am able to “push” a physical check to my mortgage company. If I put “extra principal” on the memo line, it’s applied correctly to my loan. For everything else, I either pay via the company website or ING’s online bill pay.
I noticed you mentioned scanning your statements/documents. Do you have the option to receive these electronically? I receive most bills/statements via email or download from the company website. I think the mortgage statement/bill is the only one I receive via mail. I keep each one until I make a payment and confirm that it has posted to my account.
I use MS Money and it automatically downloads my credit card transactions for me. I keep receipts until I see the transaction has cleared. Then I either toss it (for minor items) or file it (for major purchases). I have almost no paper filing anymore.
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my bank provides me with free billpay as long as i keep a certain balance. i pay my rent this way as well. in the last year, i’ve used two paper checks and they were both to friends for sports teams dues because i forgot to get cash before the game. i always carry one check in my wallet just in case.
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@mikemc – You may be thinking of ING savings accounts. I am able to use online bill pay as well as send paper checks from my Electric Orange checking account.
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My wife and I have been as paperless as possible for years… We use a Bill Management Service called Paytrust. (Http://www.paytrust.com) It is one of the oldest online bill management services around, and used to be independently owned and operated but have been acquired by Intuit in the last 2 years. All of our bills are either retrieved electronically by Paytrust, or are mailed to a PO box (unique to us) at their Imaging facility and then presented to us electronically.
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If you have an electric orange checking account with ING you can pay all your bills electronically through push transactions and even send paper checks through first class mail to those businesses that do not accept electronic bill payments for free.
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savvy wrote: I noticed you mentioned scanning your statements/documents. Do you have the option to receive these electronically?
Out of curiosity, I checked my scanned documents for the year. Turns out I’m only receiving two regular personal items on paper on a monthly basis: the mortgage bill and my credit union account statement. I’m almost positive I can tell the credit union to send me electronic statements only. I don’t think I can do this with the mortgage, but I’ll check.
There are still some irregular items that come by mail — insurance policies, social security, etc. — but most of these are items I’d want to keep the original of anyhow. All of the remaining documents are business-related.
I guess what I’m trying to say is: A scanner may not be necessary for many people.
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For backing up scanned documents, I use Mozy Home (http://mozy.com/home). I have it set up to monitor folders where I put the documents, and it backs up the files nightly, or you can force a backup when you’re done scanning. It’s free up to 2GB, which I’ve yet to max out. After that, unlimited storage for something like $5.00/mo. Very nice, and easy to use.
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Re: bill-pay fees at banks
My bank doesn’t charge for bill pay if you do it through its website, but it charges a monthly fee if you want the convenience of entering the bill pay through Quicken. But one day I happened to be on the phone with the right phone rep. of the bank, and he asked whether I wanted to request a waiver of the monthly Quicken bill-pay fee. I said, “Of course!” He put in the request, it was granted, and I haven’t had any monthly bill-pay fees from the bank since. I would have never known to ask…. but now suggest that anyone interested give it a try!
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I use billpay for my mortgage, which is electronic. When I pay extra principal, I make a separate payment. My mortgage holder sometimes has a problem separating out p+i payment from extra principal when I lump them.
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I used to use Quicken to manage my money, but I recently discovered Yodlee and absolutely LOVE it. Yodlee allows you to see all of your accounts real time, from frequent flyer miles to checking accounts. It’s amazing. You also can customize transactions and categories. For electronic file management, I currently used DocumentWallet until it was recently replaced with ReceiptWallet. Both pieces of software are awesome. You should check them out. I’m curious about your file naming structure. Could you share that with us?
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For anyone really interested, Wells Fargo has the best online bill pay I’ve found. You can schedule the payments in advance (one-time, recurring, etc.) and the billpay forecasts your balance in 7 days (after it pays your bills), which is very helpful for the financially challenged. You can categorize your bills, too, to keep track of auto expenses, household expenses, insurance, etc. One very nice feature is the “My Spending Report” which tracks all of my spending each month, and I can even categorize my ATM withdrawals and my checks into categories. My Spending Reports tells me my average for the past 12 months, and keeps track of where my money is going. When I sat down to write up my budget, my spending report doesn’t lie about how many times I’ve been swiping my debit card at fast food or pricey restaurants, or how much I’m using the ATM. The best part is you can download it in different formats for your own use.
I even billpay my dad every month, as he pays my car payment and insurance and repay him. I do this so the check is always sent on my pay day, it saves me gas and/or a stamp, and I can pre-categorize the payment so I always know how much I’m spending on “auto expenses” each month.
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Wow, your system is very similar to my own, although I use ING for everything including checking and mortgage. Sending checks by mail, and electronic bill pay are all free. I use the heck of ING’s free check mailing and save .42 sents each time I do it. there was a break in time I needed to get comfortable, but now I love it.
I don’t scan documents as I have a decent paper filing system setup, but like you I only get a few things by snail mail and even less needs to be filed.
I also use the same process with quicken, and I am happy to stay there for a little while. I wish ING and Quicken played nicer though. Only 4 of my 12 accounts download when updating from quicken, the rest I need to download from ING.
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If you don’t have the money to buy a ScanSnap, but still want to be able to make paper documents searchable you could try using your existing scanner or digital camera in conjunction with Evernote. Evernote can identify and index words in images making them searchable.
Evernote Overview
http://www.youtube.com/watch?v=i_ncr1Ee9e8
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We are pretty much completely electronic (thanks to free BillPay) save for a rare medical bill or irrigation that is paid so infrequently. I have a monster shredder and shred everything from the gazillion credit card offers to bank statements and other statements. Many I shred right away once I confirm accuracy as they are available online (past bank statements and ccard statements for example).
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Wow JD congrats on the system. Use your ING electric orange account to send the mortgage a paper check and you won’t have to pay for the stamp.
I have to pay my car loan via paper check because they charge for bill pay and credit card payments.
All you do is go into Electric Orange and choose pay by check, put in the amount you want to pay and the address. The send the checks out every month and you can vary the amount if you want or just leave the set amount.
Easy to do and saves you money. The mortgage gets a paper check and you get your ‘auto bill pay’.
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What my credit union does, and what I suspect the other free bill pay banks are doing is:
a) The first check goes out on a paper check.
b) The bank notes which account it gets deposited into
c) Future ‘checks’ are not actually paper, but ‘echecks’.
This way the bank isn’t actually paying postage on every bill you pay.
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For what it’s worth, my blog post today was also about our money system. We do still keep paper copies of bills, but they all say “paid online, May 20/2008″ etc. on them.
http://richerandbetter.blogspot.com/2008/05/our-financial-strategy.html
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I am very impressed. I would love to get to a system like this. I think most of my reluctance is having to scan documents and create that digital filing system. But it has to be better than having tons of paper.
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ING Electric Orange allows you to “send payments”. It later, automatically determines whether the receiver accepts electronic payments or not.
That may be an issue if you need to separate, principal and interest for your mortgage payment.
Now, I’m having a hard time swallowing the $400 scanner. I’m curious, do you use this for anything else other than your new paper-less system? I can’t help but think it’s overkill for monthly scanning of a few docs.
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Before I moved out to attend my first year of college, I opened a bank account with Wells Fargo. I knew from the start that I would want everything to be done electronically. I would not be living at home, so mail would either have to be forwarded from home, or be sent to the dorm mailboxes, and who really trusts the people that manage the mailboxes? Ever since opening that account I have moved away from Wells Fargo and onto ING, where I have my checking and savings accounts. The only caveat is depositing money that isn’t direct deposit, so I have to keep my Wells Fargo checking account around for check deposits. My organization for my finances is basically ING for my checking and savings, Wells Fargo with a checking, which I only keep $1 in to keep the account open, and a credit card, because of the high limit and history, and then a Citi credit card that has a good cash back setup.
For automation I really don’t trust it. I like to type in those numbers personally. I only have two bills a month, so going to those websites and clicking a few buttons is not to much of a hassle.
For backup I use a Guardian Maximus. It is an external enclosure that has a RAID 1 hardware controller, which mirrors the two hard drives inside of it. Thus, you get the extra data security. In addition, I have a hosting plan with Dreamhost that offers about 500 GB of online storage, so I am developing a method to compress/encrypt my files and upload them at some sort of interval. This backup plan might seem overkill, but I am extremely paranoid about losing my computer data.
That’s my story, keep up the great blog J.D.
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Sounds like you’ve got quite a handle on going paperless, J.D. I’ve begun the process, but haven’t gone completely paperless. Thank you for the encouragement to go ahead and improve the process. I’ve got nearly three filing boxes chock full of old receipts, bills, paystubs, etc., whereas I could simply purchase a small flash drive every year and keep the information backed up on it, stored in a fireproof safe.
On the mortgage company, as others have said, I think there’s an easy work-around. I have a free checking account at Bank of America, which gives me free Bill Pay, and I can either send to a number of vendors electronically, or they will send a physical address to anybody I choose – no monthly fee…
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On the subject of ING and higher yield savings accounts, I decided to check if my bank (Washington Mutual) had anything to offer in response to online banks. Turns out they do — their Online Savings product offers 3.25%! Since I was already a WaMu customer I was able to open the new account and transfer money from my existing savings account without any hassle.
Although I didn’t end up opening an ING account, I can say thanks for motivating me to check out my options.
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Seeing people use several accounts with one bank for earmarking funds made me want to share a trick I use in Quicken.
Quicken has accounts that you can set up called “Savings Goals”. You can earmark funds and transfer them into these virtual accounts from your bank account. You’re not really transferring the money, it’s just an internal transfer. When you reconcile the bank account, Quicken knows the true balance. You can choose to view these transfers in the register or not. However, if you use these accounts, your cash balance on the main page reflects your balance less what is earmarked, as these funds are listed in the assets section.
The point is, if you have $10,000 in an account, but $5,000 is earmarked for a new car fund, then your cash balance shows $5,000 and you have $5,000 in the asset section under New Car Fund. The problem is, you’re never sure until you click inside each bank account exactly what the balance really is.
My solution was to set up a “Savings Goal” bank account. All earmarked funds are transfered from this account and it is always negative (contra account). That way, I can have as many fund accounts as I’d like, but I always know their total, and I also know how much of my cash in the bank is earmarked.
I use the automatic transfer feature in Quicken to make these transfers, so it’s not something I have to think about. And if I decide to change something or use it for something else, I don’t have to do multiple tranfers with a real institution. My transfers all happen “in house” so to speak.
I hope this made sense.
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JD, good work! I’ve been paperless for about 2 years now. I use a Sharp AL-1655CS all-in-one laser printer, scanner, etc. I only keep paper for things that REALLY matter now, and shred or recycle the rest, depending on whether there is anything on the document beyond my name and address.
I use Quicken and reconcile 2-3 times per week. I use my credit union’s free online billpay for any creditors that won’t pull payments. I reconcile paper receipts against Quicken, then toss them unless I plan to claim business expense, in which case I scan, then toss.
I absolutely concur with your point about building an effective folder structure for your scanned documents. I set up a structure that looks quite similar to my old paper filing system.
Backups are a MUST when going paperless. I rotate external drives between home and a lockable flip cabinet at my office, and once a year I stick a year end backup drive in my fire safe. That gives me an excuse to buy a new backup drive
Last but not least, it’s good to remember that some creditors purge older online statements (American Express, for example) so if you want to keep those for more than a few months, you’ll need to save a local copy. Most creditors allow PDF download, which works well – just save to the local file folder structure along with all the scanned documents.
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First off, J.D., awesome site. I’ve been reading your postings regularly for about six months now and find it very practical, which is impossible to find when you read information from the professors, analysts, and “experts” that write for the major publications. Simply, Thank you.
On Bill Pay:
I prefer using free bill pay for every bill, including the one’s available for auto-withdraw. To me, it’s a push vs pull thing. With the convenience of bill pay’s automation features I would rather push (initiate) all my payments/bills rather then all these different entities pulling. It’s consistent so there’s never any confusion on who’s initiating the transaction, plus it offers control if I need to make a sudden change to the payment (bill discrepancy, change in account in which it’s paid from, etc). I was once all auto-withdraw and I had to change accounts. It took me a few cycles and a bit of paperwork to get them to quit withdrawing it and get it back under one system consistently.
On Scanning:
I have a scanner and consider myself on a paperless system. Taxes, birth certificates, etc are scanned and backed up but not destroyed. I don’t do receipts, however, but I am a quicken user I know that starting with quicken 2007 you can attach receipts to transactions. For me, receipts for larger items get attached straight to the item. I used to keep everything in a file drawer but I started to count on the fact that business keep records (EOB’s, Bank Statements, Hospital bills, etc). Retailers, at the store level, are getting better at finding historical transaction as well.
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I forgot…using this Quicken tip also means that you don’t feel tied down to one bank because you have 5 seperate accounts there. You are free to follow the rates if you’d like.
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JD – consider keeping a savings account that you can access immediately, like your one at the CU. We put our 3-6 months EF in ING, along with our sub-account for general savings. BUT………
If we needed to transfer money in a pinch, we have $1K in a local bank account, and we wouldn’t have to wait 3 days to get it. Now, I know you have credit card(s), but we don’t. We are cash only, which means our “emergencies” are limited to what we have in our EFs. Since becoming DF, we have had to use this mini-EF once, and then we were able to refuel it really quickly. Waiting 3 days to get your money is not an option. If you don’t have check writing priveledges or a credit card (yuck!), keep a local account….
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I’ve never been comfortable going paperless. It seems to add too much complexity to do a simple task. I do use MS Money but still write out the few remaining checks by hand.
That being said, I have gone to paying most of my bills either online or with my credit card. Note: I pay my balance in full every month.
I also turn off paper billing whenever possible. This is mostly because my mailman is semi incompetent. My neighbors and I are getting the wrong mail all the time. The less financial info I have mailed the better!
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I can’t believe your mortgage company charges extra for people paying them electronically. How stupid is that? It’s actually easier and more reliable for them to receive electronic payment. In the UK most companies actually charge you more if you don’t pay electronically (preferably by direct debit – ie. automatically) and also if you want a paper bill. I don’t like that they do this but it seems perverse to incentivise people to use cheques.
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Wells Fargo (and I’m sure a few other banks) offers Bill Pay for free if you maintain a minimum balance or have direct deposit, etc.
Also, WIN2PDF is a free program to create PDF files from pretty much all formats. I use it when I want to save a file as a permanent document. For example, the confirmation page of an online order or other such receipts.
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What do people do about protecting the scanned documents? Any type of encryption just worried if someone got they hands on the computer they could have bank account information etc.
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I’m in the process of migrating my checking from ING to an account at USAA. USAA’s checking doesn’t have a significant interest rate, but on my checking the amount of interest I get even from ING is almost negligible. Here’s why I’m switching:
1) USAA offers a feature called “Deposit@Home”. If somebody gives me a paper check, I sign it, scan the front and back through the web interface, and it’s automagically deposited. I destroy the physical check and I’m done. (With ING you need to mail in the checks- great possibility for loss and/or fraud)
2) USAA accepts eBills, which ING does not (nor any other bank I’ve had). With eBill, I can tell USAA to automatically pay either the minimum due, a fixed amount, or the entire balance due on my credit cards, cell phone, utilities, and other bills. Most bill pay services only allow for a fixed amount to be scheduled monthly. Not all billers are capable of sending eBills, but lately more have been offering it. Just recently my utilities began sending out eBills (I had previously signed up for a budget plan just so it would be a fixed monthly amount).
Unfortunately, USAA has eligibility requirements. You’d have to check their website to be sure but I believe you must be either: A) active duty military, B) a retired military officer or immediate family member of a retired officer, C) child of someone who currently has an insurance policy through USAA.
(Oh, and they also reimburse ATM fees- trying to find an ATM on ING’s AllPoints network is a royal PITA)
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I have a myCash account with Fidelity which has a really decent interest rate, is FDIC insured in a real bank, has free checking, free ATMs everywhere (any fee is refunded), and free billpay. I’m not sure if there is a minimum amount required to have a myCash account as my main investment account is with them.
I think the issue with statements and payments (and pre-payments in my case) with mortgage companies is really something to look out for when shopping for a mortgage. Many people only consider closing fees and interest rates, but pre-payment penalties and annoyances in making easy payments should be considered as well.
I’ve heard of the USAA Deposit@Home feature! I wish Fidelity had that, although I can mail in a deposit or take it to the nearest Fidelity office.
Backups are key!! Hard drives are cheap these days, and it’s easy to get an external hard drive, copy everything over and then store it somewhere secure and away from your home. If you’re extra smart, you’ll encrypt it, too. Be sure to update your offsite backup periodically, too.
I have a ScanSnap, and LOVE it!!!!
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Excellent post! I also started looking at automating most of my daily routines after realizing that part of simple and frugal living is by optimizing every aspect of our life.
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My system is similar to yours, JD. I receive electronic statements for electric and cable/internet bills, as well as all of my credit cards and bank accounts. The only things I receive paper statements for are quarterly investment account statements, and monthly rent bill (because they charge for water/trash/sewer on this as well). I have the cable/internet company pull from my credit card (to get the cashback rewards on my card), and the electric company pulls from my checking (cuz they only accept checking accts for auto-billpay). For my credit cards, I set aside the money needed to pay the bill, based on my budget, into a high yield savings account. About 5 days before it is due is when I schedule the payment to actually happen, and I put a note in my calendar to transfer $x amount to which account on what date, to make sure I cover that scheduled payment. Yes, it is slightly more complex – but I make about $4 in interest this way per month, along with about $10 cashback on my credit card each month (I pay for everything on a rewards card that I pay off each month). And really, if you’re not doing automatic credit card payments anyway (which I would not advise, just to make sure you’re reviewing your charges), it’s only 1 more step to use the bill pay savings account to hold onto your money until it’s actually due. I used to pay the bill the day it came out – but now I see the advantage to holding onto what is mine until it is actually due.
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I am pretty much paperless except for the one or two times a company sends me something via snail mail.
All my bills are sent to me via email since I opted for paperless billing. Since my primary email is a gmail account, they are automatically tagged and filed for future reference. I don’t have to worry about backups since all of that info is on Google’s servers. (Yes, I understand that my account could be hacked, exposing my info, etc. but who’s to say your home PC can’t be hacked and main copies and backups destroyed via virus or malware, scripts, etc.)
As for those 1 or 2 occasional paper bills that are sent to me, most of those can be retrieved online. Therefore, I don’t necessarily see the need for a $400 doc scanner, unless you want to archive old papers as well. However, I do have access to a Fujitsu doc scanner at work, so in that respect I do consider myself lucky.
I use ING for my banking. I do not like that they do not have the specific e-Bill system. My traditional bank is Wachovia. I liked their payment and e-Bill system much much better than ING. But, I have learned to live with the ING way of doing it.
One last thing, if you subscribe to Dave Ramsey’s “envelope system” I have brought that into the modern world by creating an electronic envelope system with ING. They allow virtually unlimited savings accounts. So for every envelope that I normally have, I create an “electronic envelope” (a savings account). Then I automate the distribution of money into those savings accounts when my paycheck hits. When it’s time to pay the bills, I transfer the exact amount out of the savings account, into the ING checking and pay the bill
Also, as a security feature, I set up one savings solely for online transactions via Paypal. I keep $0 in there until I have a transaction and then I transfer that money into it. In case my Paypal account is ever hacked, all they can get to is my 1 savings account that will have $0 in there
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For the person who asked about file naming conventions, the key is to do year, then month, then day, and to put the date first in the name. Then the filenames will sort chronologically. So 5/20/08 becomes 20080520, or May 2008 is 200805. You can use spaces or dashes to make it easier to read (i.e. 2008 05 20 or 2008-05-20), as long as you’re consistent from month to month.
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Online backups – I’ve been using Carbonite for over a year now and really like it. It’s $50 a year for unlimited backup (they’re currently backing up about 40 gigs for me). It has a small piece of software you install that runs in the background. Once a day it checks for new files or changes to files and sends them up. It’s saved me a time or two as I wrote over prior versions of files.
I’m a USAA user too and while Deposit@Home had its kinks at first I now LOVE it. I just scan in my paycheck or any other check and it instantly appears in my account. It took me a while to get used to shredding checks once I deposited them!
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J.D. Make sure you ask your credit union if there is a “paper-less” credit. Some of the companies that I get electronic statements from give me a $0.50 credit per month, others have planted a tree for me when I’ve switched.
Lastly, don’t be loyal to your credit union. Mine didn’t give me an option for a no-fee, high interest savings account. The best they could do was reduce my monthly fee to $8.95 per month unless I kept a $2000 balance.
I was tough closing the account because they’re local, courteous, and quick; but in the end I moved somewhere else (ING Direct).
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I’d like to second the recommendations for USAA. I use ING Direct for long term savings, but all of my checking and insurance goes through USAA. One nice thing is that when I initiate a transfer from ING to USAA through the USAA website, the funds show up in my USAA account immediately. This solves the problem of keeping your emergency fund in an account with a delay in the withdrawal.
Also, I have been very happy with the Mozy service (https://mozy.com/?ref=4F64C7). I have 2GB of online backup storage for free, and they offer free software on their site to automatically backup folders/files you specify.
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@ Chris:
“What do people do about protecting the scanned documents? Any type of encryption just worried if someone got they hands on the computer they could have bank account information etc.”
If you take appropriate cautions, you are no worse off than somebody stealing your mail, possibly in better shape. Put a password on your computer to prevent access, make the screen saver automatically log you out, or require a password to gain access, and don’t place your computer in the DMZ on your router… I’d say you have a better chance of getting your paper mail stolen and looked at than the security of your home computer compromised.
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To geek from Post 44, I just wanted to say your idea with the Paypal + ING Savings Account is genius. I am just starting to toy with eBay and Paypal and was reluctant to assign my checking account to it. However, I will now be using your method =).
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