| This ties in with the "Pay
Yourself First" idea... Yes, pay yourself first...
and do it automatically!!
To really be good at saving and
paying your bills on time, set it all up to be done
automatically -- including your donating.
Your Paychecks and Your Savings:
Definitely have your company automatically deposit your
checks. If you can, have them put your x% into
checking and y% into savings. Then, you are
automatically saving your desired percent. If that money never hits
your checking account, it's easy to pretend it just
doesn't exist!
Your
employer will also set you up so your 401K deposit is
done with each paycheck. Remember that you're
employer MUST make your 401K deposit directly out of
your paycheck for you and that money can never hit any
of your personal accounts. This is what keeps it
sheltered from taxes!
Your Bills:
Almost ALL bills can be paid automatically!
There's a handful of ways you can do this and each
company will have their favorite:
-
Automatically taken from your checking account.
This one's the most popular. Look at
your next statement... There will be a website
listed... Register at their website and you'll
be able to set it all up. They'll want your
bank's routing number (they'll tell you where to
look on one of your checks) and your account number.
They'll just send you an email when you can view
your bill. You can even go "paperless" and not
get their snail-mail bill.
- There are some bills, like
electric and American Express, that I like to get a
good look at BEFORE the bill is paid. For
these, I'm all set up on the website, but I have
selected the automatic payment. They send me
my e-statement... I go in and look at the bill
(for errors)... If it's OK, I just hit a
couple of buttons and the bill is paid right out of
my checking account. It all takes about 30
seconds.
- There are some companies
that won't have a website that's set up for the
payment stuff. My water company is this way.
But, they let me fill out a form (that I got from
their website) for automatic payment... I just
gave them a voided check and I was all set up.
- If the company can't
connect to your checking account, you can usually
have the bill paid by your American Express card.
Remember, you have to pay this one off each month.
This is also REALLY nice when you want to keep a
yearly tracking of how much you are spending on
something -- like your cell phone.
Always,
always, ALWAYS have your mortgage set up to be done
automatically! You don't want to be late on
that puppy! (Same with car loans.)
Your Donations:
This can often be set up just like your bill paying.
It just depends on how big of an organization it is.
World Vision, for example, has a nice website all set up
for giving.
One note about charitable
organizations: Before you pick where to donate,
definitely check out how much of your money goes to the
actual need (like the children) and how much goes toward
"administrative costs" (this is the paychecks of the
people who run the thing.) Having 15% or less
going towards administrative costs is reasonable.
Anything more than 20% and I'd steer clear.
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