This guest post from Jason is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. Jason and his wife run Gravity Switch, a company that does web development and iPhone/iPad development.
In addition to doing the grocery shopping, I pay the bills in my family. A few years ago, I found out a way to put about $70 back in our pockets every year. Half was expected, but half of it was a surprise.
I’m a big believer in J.D.’s switch from anti-credit card to pro-credit card. I have a rewards card, which I use for everything I can. I pay off the balance in full every month. Because my monthly balance is often over $2,000 (child care, gas, groceries for my family of five, etc.), when I mess up and put the credit card check in the gas bill envelope — or something equally silly — it costs us at least $50 between late fees and interest.
Rather than run the risk of a missed payment, I’ve set up autopay on my account. Since doing so:
- I haven’t paid a late fee ($25 savings a year)
- I haven’t paid interest ($25 savings a year)
- Because I always keep a few months emergency fund in my high interest ING account, I never have to shuffle money to pay
There’s an added bonus. Since my credit card balance is usually about $2,000 a month, and since I’ve set my credit card to pay on the last possible day, I basically keep my money in a high interest savings account for another 15-30 days and earn another $20 a year (at current rates) in interest on that money.
This automation doesn’t save me a fortune, but every little bit counts, right?
You can set up autopay by calling your credit card company, or logging into your online account. It usually takes a month or two to go into effect. You need to provide your bank account number, bank name, and bank routing number. It’s important that you set your credit card to pull the money from your bank (as opposed to trying to get your bank to send a check to the credit card company every month). That way it will always be paid in full without any interaction from you, and your credit card company will be liable if there’s a bank holiday, or if there’s some error in payment so you can easily contest the charges.
I’d actually like to automate more of my financial life. My wife and I own some rental property (our old house is now two apartments), and we’re not always good at depositing the checks quickly. At any given time we might have $2,000 in checks to deposit. So, I’m currently in the market for a bank that allows me to deposit checks using my iPhone.
There are apparently a few services that do this, but the only ones I’ve been able to find are either exclusive (i.e. USAA is only available to members of the armed services) or have a per-check limit of $1,000 and a monthly iPhone deposit limit of $3,000. Since my monthly total is over $3,000 and since some of the rent checks are over $1,000, this doesn’t work for me.
Have you deposited checks with a mobile phone before? How does it work for you? Have you found someplace that lets you do this and pays a high interest rate and doesn’t impose low limits?
And more to the point: What parts of your financial life have you automated? Do you autopay your credit cards? Your utility bills? Your rent or mortgage? Or are you nervous about setting up automatic payments? I’m curious how other GRS readers automate their finances.