Mundane Money Mechanics

Having sold the business, I'm reorganizing checking accounts, etc. Here is my plan for the day-to-day mechanics of paying bills.

Our personal checking has a interest rate of .2% (what a sense of humor banks have!). I like to have a checking account at a local bank, because it gives us a safety deposit box, and personal service (great customer service, actually!), etc.

So the key is to have as little there as possible. I use Quicken to automatically pay bills from that checking account, so I plan to keep $500 in that account, and then at the start of every month, EFT enough from the money market account to cover monthly bills.

Any better schemes?

[REWahoo]

Quote:

Originally Posted by TromboneAl Any better schemes?

Not really, but to hold down the number of bills I have to manage out of my checking account each month I have several charged directly to my credit card. That way I only have to worry about paying the CC bill (in full) plus get a rebate from the card.

I'm sure you are already doing something like this Al, but wanted to include it in case someone else isn't taking advantage of this time and money saving tip.

[cute fuzzy bunny]

Me too. Anything that can be charged to a card goes on a rebate/rewards card, everything else is autopaid out of the checking acct by my banks free bill paying service or by automatic debit. Only two things I have to do by hand is pay the credit cards in full every month because the bill payer only does the minimum on its own.

I have a chunk of cash forwarded by vanguard from my Prime Money Market fund. All my funds forward their dividends and interest to the money market fund. When I get more than a few thousand extra in the checking account I push the excess back to the money market acct. When the money market acct gets too fat, I look for stuff to push that money into.

Edit: checking acct also has a $5000 overdraft protection on it that doesnt charge me any interest at all if I pay it off within a day or two, and an email gets sent to me if it gets used. No fees or penalties.

Just in case the autopays pay too much for bills, I dont look at the bills or the acct for a month, etc. Not that that would happen...but...

One other mundane money mechanics thing. It occurred to me about a week ago that if I got hit by a bus that my wife would have no idea what the hell was going on with our money. I explain it to her from time to time, but I could probably insert "and my head is on fire" in the middle of it with no adverse effect. So I wrote up a four pager explaining our investments, how and where the money flows, why we do what we do the way we do it, and put that (after wifes proofreading and editing) on a cd and a secure digital card along with a file with all of our accounts/passwords, tax files, and any other relevant financial tidbits.

Now if something bad happens to me or to both of us, theres a detailed explanation of all of this.

The WillMaker software I have (and still havent fully finished doing yet :P ) has a place to insert information like this for 'after death instructions regarding finances'. I'll insert it there as well.

[SteveR]

I do my mother's bills etc. since she is blind. *Granted her bills are few but since she lives 2500 miles away I have taken the easiest route for me. *

Essentially, her checking account is automatically drafted for recurring monthly expenses. *Anything else is paid on-line with very few exceptions. *When she goes out to Drs. and shopping (very rare) she uses a CC which drafts her checking account monthly. *Income is automatically deposited in her checking account and I check it every month to move any excess to a MM account at the same bank or EFT to Vanguard for better options. *Any large income needs are addressed through EFT back into the appropriate account. *The only check she writes is to her church...she feels better about dropping it in the "plate" every week than doing it via electronic Checkwriting. *

Once we retire we will set up a similar process (beyond what we already have) mostly for income to go in to the existing accounts. *

[Nords]

Quote:

Originally Posted by TromboneAl So the key is to have as little there as possible. I use Quicken to automatically pay bills from that checking account, so I plan to keep $500 in that account, and then at the start of every month, EFT enough from the money market account to cover monthly bills. Any better schemes?

Don't know what's available in your area, but you should try a credit union. Their membership "requirements" cast a wide net and you'll fit in somewhere. It might not even matter if the CU is in your area. We only physically visit our CU every year or two (e.g., for a cashier's check) and we do the remainder of our banking online or via the mail.

Many financial institutions no longer charge charge for the bill payment service. If you're paying for it you might be able to do better through a brokerage (Fidelity) or a CU.

Quote:

Originally Posted by Cute n' Fuzzy Bunny Anything that can be charged to a card goes on a rebate/rewards card, everything else is autopaid out of the checking acct by my banks free bill paying service or by automatic debit.

I had a credit card stolen years ago and it was quite a hassle getting everything straightened out. I can only imagine the disruption that would have caused with a bunch of automatic billpayer accounts, and I'm still reluctant to put bills on the cc for the rebate. At roughly $400/month on a 1.5% card, I'm losing $72/year to my reluctance.

I don't think I'd put a telephone bill on a credit card or on automatic payment. If my phone is hacked and the bill is run up, the last thing I want Hawaiian Telcom to have is our checking account or credit-card numbers.

[wallygator69]

Quote:

Originally Posted by Cute n' Fuzzy Bunny The WillMaker software I have (and still havent fully finished doing yet :P ) has a place to insert information like this for 'after death instructions regarding finances'.* I'll insert it there as well.

Hi,

Been putting off updating the Will for a while now. Is this Will maker program easy to use and is it good (ie. solid legally) I assume you need to have it notorized but beyond that any downsides. Other than cost does a Lawyer get you anything?

Thanks As always,

Wally

[cute fuzzy bunny]

Its a lot easier to contest credit card charges due to fraudulent activity than it is to challenge someone who got their hands on one of your checks and drained your checking acct...

Only the stuff that I realistically am not going to openly challenge and pay gets autosucked from our checking acct...the electric bill, the water bill. I think the credit card shield is a better one than mailing checks or having my banks bill payer mail checks.

$72 is two free lobster dinners...

[Nords]

Quote:

Originally Posted by wallygator69 Been putting off updating the Will for a while now.* Is this Will maker program easy to use and is it good (ie. solid legally) I assume you need to have it notorized but beyond that any downsides. Other than cost does a Lawyer get you anything?

WillMaker is supposedly certified to be at least as good as a member of the bar (I can see Martha snorting her coffee out of her nose now) but perhaps you don't want to depend on a software company to defend your estate planning in probate court. The likelihood of problems depends on the features & complexity of your estate plan.

We used WillMaker to draft a will while educating ourselves on the options. When we went to the Army base to talk to a "real" lawyer, we were able to give them a draft ("Please make it like this") and to discuss all the options that Willmaker had already talked us through. We ended up with the usual A/B trusts and the lawyers were doing their draft on a slightly beefier (no doubt more expensive) version of WillMaker.

I think a lawyer would be inclined to negotiate their fee if you hand them a draft and a diskette and seem to understand the options. They save a little time & hassle on educating you and might be willing to pass on the savings.

[cute fuzzy bunny]

Quote:

Originally Posted by wallygator69 Hi, Been putting off updating the Will for a while now. Is this Will maker program easy to use and is it good (ie. solid legally) I assume you need to have it notorized but beyond that any downsides. Other than cost does a Lawyer get you anything? Thanks As always, Wally

Nothings as good as a real lawyer I suppose, and as Martha pointed out, filling out the form documents isnt the big problem...knowing what questions you need to ask yourself and figuring out the answers is the hard part and the area filled with crocodiles. For example, figuring out who would take custody of our son if we both died, and who would control the money are interesting questions. Especially when the one guy who knows enough to handle the money is not on speaking terms with the woman we'd most like to give custody to...

However, if your net worth is under 1.5-2M or thereabouts (the area in which one should consider doing a Trust), the software should be good for you. It asks a lot of questions, has hot links to a 'legal manual' and a 'help guide' that gave us good examples and explained the pitfalls and gotchas, then it grinds out everything from a will to the power of attorneys, living wills, medical documents, etc. I havent fully finished ours as it requires broaching difficult topics with a number of people and I just havent felt like it lately. I finished my dads, and he had a retired lawyer in the neighborhood look it over...he said it was as good as anything he would have done. Everything required either a set of witnesses and/or a notary to sign and the software gives you those options and explains the benefits of witnesses vs notary vs both. One document he did having to do with homeownership had to be recorded with the county but that was a 5 minute deal.

Took us about 40 minutes start to finish to do his. I think I paid $20 after rebate for the s/w.

[justin]

Quote:

Originally Posted by Cute n' Fuzzy Bunny $72 is two free lobster dinners...

Or 720 free ramen noodle dinners.

[cute fuzzy bunny]

Shoot man, you're shopping at the expensive places. I havent bought ramen in a while but our el cheapo has them 20-25 for a buck sometimes. I think they're knock offs though.

Few things can frighten a starving college student more than the spectre of knock-off ramen noodles...

[justin]

I added cost of water for cooking and cleanup, electricy/gas for heating the noodles, cheap immigrant labor (from China) to cook the Ramen (I know it's Japanese, not Chinese, but who _REALLY_ knows the difference?), and transportation costs to/from Walmecca.

What you think costs you $.04 really costs you $0.10!

[cute fuzzy bunny]

Water? Electricity? Transportation? You mean you dont just walk over to SmallMart, sit down in the aisle and munch on them?

Hmmm...strange customs have you smartalecs

[KB]

Al,
I do most of what you've outlined and it works well for me. I move over a certain amount at the end of each month, so I always start with the same amount each month. I do it manually as my income fluxuates. Some months I don't pull from my MM, some months I do.

I have all my utility bills deducted from my checking account automatically and pay the larger bills like insurances with my credit card. Then I manually pay the CC bill using the free bill pay that I get with my account. I deduct all the bills in my checking account register on the first of each month, and live off the rest. I keep $300 surplus to prevent an account charge.

I do keep $1000 in a savings account linked to my checking account. And $300 cash in my safe. Just in case.

[thefed]

Quote:

Originally Posted by Cute n' Fuzzy Bunny Shoot man, you're shopping at the expensive places. I havent bought ramen in a while but our el cheapo has them 20-25 for a buck sometimes. I think they're knock offs though. Few things can frighten a starving college student more than the spectre of knock-off ramen noodles...

Well, I have to vouch for mypart of the country... $0.10 is the norm here, the el-cheapo's are about 12/$1.00.

[JohnP]

Al -

After retiring, I began automatic payment of virtually all of my basic expenses- mortgage, car pmt, utilities, taxes, etc.* Currently, I only write physical checks for items that are scheduled for quarterly or more infrequently.* I wrote only four checks in Feb - for semiannual prop taxes, one-time expense for home repair, quarterly insurance, and a magazine subscription.

I use quicken but not in a way I have ever seen discussed;* first of all, I don't use bank bill-pay even though it is free with my bank (chase) and I don't download transactions from any institution - don't think Quicken needs to know all that info.*

I like to see my projected expenditures so I use my 'Scheduled Transaction List' to detail all of the normally scheduled expenses and income 'events'.* I normally then manually select each item for the next few months to project normal income and expenses - currently I have displayed in quicken the projected events to the middle of May 2006 - including my credit cards at average values as the wild-card.* That way, I can anticipate what bills are to be arriving and I can mentally prepare to adjust for high vacation expenses or other lurking expenditures.* When it comes time to reconcile I usually only need to enter the bank balance and check off the items that have cleared.

The automatic transactions are marked as ETF in the number column - the wild-card credit cards I leave without numbers or other notation until I get their statement so I know the payment amount and the expense categories.*

May sound complicated but it works for me.* It has cut down a lot on check writing and unpleasant financial discoveries.*

Best regards

JohnP

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