Beating Broke

Personal Finance from the Broke Perspective

4 Ways to Make Sure Your Bills Get Paid On Time

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You’re busy.  I get it.  I’m busy, too, and sometimes I forget to sit down and pay my bills in a timely manner.  However, I don’t want a ding to my credit score.  Because I’m so busy with my kids and their many activities, and L.I.F.E., I use several strategies to make sure my bills get paid on time.

Here are some of my favorite strategies:

Set e-mail reminders.

For each of my credit cards, I have set up e-mail reminders.  Depending on the company, I’m sent an e-mail reminder six to 10 days before my payment is due.  I can’t tell you how many times these e-mail reminders have meant the difference between a late and on-time payment.  Everyone should set e-mail reminders for their bills, in my opinion, especially if you have a very busy schedule.

Set up recurring payments to your credit card.

While I generally avoid setting up recurring payments to my checking account, I do advocate setting up recurring payments to credit cards.  Why?  If a charge is fraudulently applied to your credit card, the credit card company protects you.  If the same thing happens to your checking account, your entire account could be emptied, and then you would miss other payments to other creditors and have to pay for bounced checks.

In addition, if you have a credit card with a rewards program, you could gain rewards simply for paying your monthly bills that you used to pay via check and snail mail.  Those points can add up quickly when you’re paying your monthly recurring bills with credit cards.  Just make sure to pay off your credit card each month.

Set up a special account for automatic payments from your savings or checking.

If you still prefer to set up automatic payments to your bank account, I’d suggest setting up a separate account just for automatic payments.  Then, if there is an error on the vendor’s part, you don’t risk paying overdraft fees on your regular checking account.

I have one account that is devoted solely to automatic payments for my husband’s student loans and our life insurance (the only two payments I have set to auto pay from our bank account).  These are both fixed expenses, so at the beginning of every month, I just schedule a transfer to that account so the payments can be deducted.  Since I don’t use this account for any other purpose, there is no worry about not being able to make other payments or bouncing checks.

Keep all of your bills in one place.

If you’re still receiving bills in the mail rather than electronically, keep all of your bills in one place.  If you use snail mail, also keep stamps there.  Then, when you’re ready to sit down to pay your bills, you have everything you need right in one place.

What are your strategies to make sure your bills get paid on time?  What suggestions would you add to this list?

Living on What You Earn Can Make You Feel Broke, and That’s a Good Thing!

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Living on what you earn can be a difficult thing.  For many, it seems like a little like a foreign language; difficult to learn to do, and backwards.  But, if you can learn it, and transform your life into one where you’re living on what you earn, it can make a whole lot of difference.  You’ve got to start somewhere, though.  I, like you, haven’t always lived on what I earned.

Almost all of my life, I’ve owed someone something.  When I was 19, I needed a car.  My parents, tired of having me call them late at night after my old, beater car had broken down—AGAIN!—, decided I should buy a new car.

I didn’t qualify for a loan yet, so my grandpa lent me the money, and I paid him back with a small amount of interest, which was less than I’d pay borrowing from the bank and more than he’d make in a safe investment.

Soon after, I went away to college and took out student loans and started running a balance on my credit cards.

By the time I finally paid off my student loans a few years ago, my husband had his own loans that we had to pay.

Can you see me, just like the proverbial hamster running on the hamster wheel?

Living on What you EarnI owe, I owe, it’s off to work I go.

Until one day, I said, “Enough!”

No more.

Time to live on what we make.

Time to stop borrowing.

Time to start saving.

And that’s when the real challenge began.

Our society is built on borrowing.  Borrow for school, borrow for a car, borrow for a house, rent to own, pay in 10 easy installment plans.

I’m done living that lifestyle, but in turn, I’ve picked a much more challenging lifestyle—living on what we earn.

Cutting Until There’s No Room Left to Cut

The first thing I did was develop a frugal, written budget.  That meant taming our grocery budget from $700 to $1,000 a month to $500 a month to feed our family of 5 with gluten, dairy and corn intolerances.  It isn’t easy, but we’re doing it.

The next step was to keep a record of everything we spend.  Honestly, I hate keeping this record, so that alone is incentive to spend less.

I spend an hour or so every week, reconciling the budget and making sure we’re on track.

I also started regularly saving for irregular expenses.  Every other week, I put $120 in an account earmarked for utilities.  In the winter, our utilities fall far below that, but I still keep saving the money for the expensive summer months.  This way our utility costs are the same all year long.

Handling Unexpected Expenses

While the new budget can feel somewhat restrictive, what I find most difficult are the unexpected expenses.  Just recently, I found that two of my kids have cavities (quite a few!), and the price for fixing them is around $400.  I have money set aside in a medical fund, but filling the cavities will just about wipe that money out.

The problem is that we have many other medical expenses–$188 for my son to get new glasses and an eye exam and a pending $3,300 expense for him to get braces.  I could put his braces on an interest free payment plan, but we don’t do payment plans anymore, interest free or not.

Instead, we had to make hard decisions like canceling our trip to see family this summer.

Living on cash is definitely not easy, but I know once we get through the next couple of years, as our income increases, it will get easier.

We are, as Dave Ramsey says, “Living like no one else so later we can LIVE like no one else.”

Do you eschew debts and payment plans, or do you use them in moderation to meet your goals?

Paying Down Student Loans with Smarterbank

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There’s little question that student loans can be one of the more difficult debt burdens that a person can have.  The cost of tuition is rising each year, and the rates seem to be following suit.  Many college graduates are finding themselves with a degree that cost as much as their first house is likely to.  It goes to reason, then, that finding any means available to help pay that debt off is probably a good idea.

What is Smarterbank?

I was recently introduced to a product offering called Smarterbank.  It’s an online checking account that’s run by The Bancorp Bank.  It’s fully FDIC insured to $250,000 and, for most purposes, operates just like any other online checking account.  Much like some other online banks, Smarterbank has some perks attached to their accounts.

In the case of Smarterbank, they give a “cashback” that goes directly to your student loans.  For purchases under $100, they apply .5% of the purchase to your Smarterbucks account.  For purchases over $100, the first $100 gets you the same .5%, and everything over $100 gets you 1%.

Smarterbank Fees

One of the nice perks of Smarterbank is that it’s a relatively fee free account.  There’s a monthly “inactivity” fee if you don’t use the account at least once in a month of $4.50, otherwise, if you’re a smart user, you’ll never hit a fee.  And, by smart user, I mean you don’t overdraft, or do something else silly.  They’ve got fees that are associated with things like statement research, etc, but those are pretty standard and you’re pretty unlikely to ever use those services.  You also get access to over 40,000 ATMs in the STAR ATM network.

The Smarterbucks Program

As I mentioned above, the “cashback” goes into your Smarterbucks account.  So, you’re probably wondering what the heck that is.  Smarterbucks is a rewards program.  Not unlike programs like Swagbucks, it rewards you for certain actions.  Things like shopping through their portal (“Smarterbucks Marketplace”) earn you cash back that is credited to your account.  You can also ask others to contribute to your account.  That option could be pretty cool to use as an alternative for people to give to you for birthdays, Christmas, or special events.

Once your Smarterbucks account reaches $15, they send a payment for that amount to your student loan.  At first, that might not seem like much, and, really, it isn’t.  But, every little bit helps.  And every $1 you pay off early is $1 that you aren’t accruing interest on for the life of the loan.  And that can add up in a hurry.

Would you switch to an account like Smarterbank for an offer like this?  Is the offer strong enough to make it worth the time?  What other offers have you seen that help with student loan payback?

See all the details on Smarterbank.