In a previous article I spoke briefly about online banking, here’s a recap:
Personally, I set up an online bank account with ING (http://ing.us) because ING does not have monthly minimums or monthly fees. With ING I can create multiple checking and savings accounts and transfer money into each account automatically. ING also helps me remain disciplined, because I can only withdraw from a savings account six times a month. This decreases any mindless spending common with the use of a debit card. Both checking and savings accounts accept unlimited deposits.
In this article I’d like to explain a why I choose online banking.
Monthly bills: ING checking accounts allow unlimited withdrawals, and have auto-reminder and auto-pay features. This account receives the largest automatic deposit because I pay my regular monthly bills from this account. These payments include mortgage, student loan, and utilities payments. My mortgage and student loan payments remain constant. However, my utilities bills fluctuate with the seasons. Therefore, I obtained my yearly bill and calculated an average bill payment amount. I deposit this amount into my checking account each month, regardless of usage, to build a “seasons reserve.” This way, if I have a $350 gas bill in December, I have the money in the account already because my July bill was only $30. Other than the “seasons reserve,” I do not keep any extra money in my checking account and that account does not collect interest so there is less temptation to needlessly spend money.
Once my regular monthly bills are paid, savings time begins! I created savings accounts for:
• student loans
I use each account to save money for specific goals, such as vacation or student loan pay-off. It is easier to manage separate accounts then one big account. It’s a way to organize. Otherwise I wouldn’t know how much I save for each goal. I can make payments from my savings accounts. In the next article I’ll explain how I treat each account.
—Contributed by Michelle Lee, Esq.