You probably have friends or family who are already veterans of this financial revolution. They also probably swear they would never go back to checks, stamps and envelopes again. Now that you’re ready to begin, let’s explore the advantages and the few disadvantages of moving to this next level of convenient money management.

Advantages of paying your bills online

Less paper, More Convenience
If you ever stressed over a misplaced bill because of that pile of unmanaged mail, the idea of less paper and more convenient payments will come as a major relief. With online bill payments, you can even select a convenient payment method of “recurring payments” for ongoing bills like rent, car payment etc. that automatically repeat the payment each month.

One-time and periodic payments can also be set up months in advance. No more saving paper bills in special folders to remember six months down the road. You can also choose exactly when you want your payment to go out – the number of days in advance of the due date (5 business days is generally recommended), or on payday or any other date.

Many companies will continue to mail out your paper bills for review if you prefer to save these records.

Anywhere, Anytime
Once you have access to the Internet, you can view statement activity, confirm the balance, finance charge and due dates, pay bills and transfer funds – all 24/7. Suddenly, your financial life can revolve around your personal schedule instead of the 9-5 schedule of most banks and businesses. Transferring funds at 2 AM while in your bathrobe is now an option.

Staying on top of your finances while you are traveling, whether for business or personal, is no longer an issue. You can log in from most anywhere to check on account balances, or even pay bills. Many hotels offer Internet access and Internet cafes are always easy to find. This means, no more bills to catch up on when you return.

Save Time, Save Money
Two things everyone seems to be short of these days are time and money. Let’s start with the money. Obviously you will be buying fewer stamps, which could save you $60 a year. Add to that the annual cost of $10 – $30 for 150 checks. Granted, this amount is not going to break the bank. However, it would cover a few good times at the movies with the family; far satisfying than buying stamps, finding all the bill paying supplies, writing the checks and stuffing the envelopes.

How about factoring in your own hourly rate, and the amount of time spent dealing with all the bills? The total annual savings for paying bills online just went up. And let’s not forget the saved late fees of $25 – $35 when every bill is paid on time each month.

Count on Security and Privacy
Due to the enormous need for security when dealing with this level of personal financial information, all the reputable companies use the highest level of security currently available. Read through the security information on your bank’s web site and any other web sites where you store your financial information.

Your account information and transactions are protected with 128-bit SSL (Secure Socket Layer) encryption, which allows users to establish sessions with Internet sites that are secure. Encryption is the scrambling of information for transmission back and forth between two points to prevent eavesdropping, tampering and message forgery.

To help protect your privacy while you are using the service, many web sites will sign you out of the Online Banking service after 10 minutes of inactivity.

Your privacy is also protected with the opt-out choice from direct marketing offers from the company itself and usually an assurance of no shared information with outside marketers.

Peace of Mind
Now you can focus your time and energy on more significant people and events in your life and not have to face the draining monthly ritual of paying bills. Another payoff is the excellent credit history you establish by paying bills regularly and on time.

Disadvantages of paying your bills online

Down Time of the Web site
There are going to be times when the system is down and you will not be able to access your information. It may happen on the weekend or late evening when you want it the most. If your financial situation is urgent, there is always the standby of the telephone. Some of the banks and credit card companies have twenty-four hour service. Also by choosing reliable bill pay system the down time will be very minimal.

Down Time for your computer
Who has not had problems with their computer, connection, or some other issue? This down time could be more challenging for you if you have also opted for the paperless route and have no paper records or printouts to refer to in an emergency when you really need to get online.

Be sure to back up your electronic files for this same reason. Those who have lost valuable data that was not backed up, will attest to how devastating this can be come tax time, bill time, etc. If it hasn’t happened to you yet, be grateful, and be sure that it never does by backing up all of your information on CD or disc.

Fees
Depending on the services you have signed up for, there will generally be some monthly fees involved. But, considering the savings of your time, energy and peace of mind, the fee may be a small price to pay for the convenience of having all your bills handled online.

And finally, remember when you are dealing with financial information and decisions in any arena, the responsibility is ultimately yours. Research your information, use prudence, and pay attention to details. Stay alert to changes or unusual information or activity when you review your accounts and are online.

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If you haven’t yet thought about or planned out a holiday season budget, today is the day to start. While the mere mention of the word “budget” probably has implanted the image of Scrooge or the Grinch squarely in the front of your mind, planning a holiday budget can have quite the opposite effect. A budget will help you consider who exactly you want to give gifts to and will most likely mean that you don’t accidently leave someone off the list. It will also give you the opportunity to plan the gift in advance which will not only save you a significant amount of money, it will give you the time to get a gift that is much more meaningful and appropriate than anything you would find in the last dash Christmas shopping frenzy.

The first issue is to consider the expenses that are likely to come with the holidays. The vast majority of people don’t even consider this making it difficult to budget for total holiday expenses. Whether you plan ahead or not, these expenses will come. By taking the initiative early and understanding where your money is likely to go, you can consider ways to reduce expenses or avoid them all together if that is appropriate. Now is the time to sit down and think through your probable holiday expenses which will help to give you good guidelines which you can follow when the holiday rush is upon you.

While gifts are an obvious expense during this season, chances are you haven’t worked out how much they will be. If you are like most people, you have a ballpark figure in the back of your mind that you hope you will come in under. Instead of hoping (which will usually equate into failing) to come in under that amount, sit down and make a list of friends and family members with whom you regularly exchange gifts. Once complete, go through your list and designate an approximate price you want to spend on each person on the list. With a price in mind for each recipient, you have a much better chance of remaining within your gift giving holiday budget.

While gifts may be the major expense, they are far from the only one you need to forecast. Other areas where you will need to designate amounts include gift wrapping, cards, entertainment, food, inside decorating, tree, ornaments, outside decorating, lights and travel to name just a few. Since everyone’s situation is different, the best way to forecast this year’s expenses is to think back to last year and all the things you did during the holiday season while adding in any new ones you have already planned for this year.

Once you have finished this, you will have a number. If that number is within the amount of money you can afford to spend for the holiday season, you’re in great shape and just need to keep it at hand so you don’t stray too far from the numbers. If you look at the amount and feel like a zero or two too many are at the end of the figure, then you need to consider ways to reduce your anticipated costs.

Reducing Christmas Gift Numbers

GIFTS: Reducing The Numbers: You should already have a list of all your family and friends with whom you regularly exchange gifts. The best way to reduce the costs associated with these gifts is to eliminate as many as possible. With the Grinch once again firmly planted in your mind, we will show you that this process doesn’t need to produce that Scrooge-ish effect. Using some simple creativity can quickly reduce the number of gifts on your list while actually enhancing the holiday spirit.

For example, if you have a close group of friends, consider contacting everyone and arranging a gift exchange. By choosing a single person in a group of five instead of giving four individual gifts, you will be able to give a better gift that will be less expensive overall. Better yet, put a ceiling on the price that can be paid for the gift. Chances are that your friends will appreciate you taking the initiative since this will also reduce their holiday expenses and time needed for gift shopping as well.

Another alternative with friends is to forego the gift giving all together. Instead, arrange an afternoon when you can all meet for a few hours to spend some time together in place of giving gifts. Not only does this fit better with the holiday spirit, it will give you a needed break from the pre Christmas hustle and bustle where you can relax and have a good time.

Gift exchanges can also work with family, but they need to be well thought through to make them successful and a lot can depend on the age of the kids. An easy standard method is for all the family members to write down a few gifts they would like under a specified amount of money. Each family member places their list with their name on it into a container and then each family member picks one list out of the container. The family members then choose one of the listed gifts to buy for their designated person. This system can be adapted to fit the needs of your particular family, but it will reduce the overall number of gifts that need to be purchased for everyone. By taking the time to make the family exchange a central point of the Christmas holiday, it can brighten the family holiday spirit as it also reduces overall costs.

Reducing Holiday Gift Costs

GIFTS: Reducing The Costs: Once you have made all the appropriate reductions to the number of gifts you are planning to give, the next step is to see if there are ways to reduce the cost of the gifts. Again, while this at first glance may seem like a Grinch-like move, in reality it is likely to produce a gift that is much more appreciated since you will be taking the time to think through and consider the gift thoroughly. To be able to pull this off successfully, you will need to start doing that preparation well in advance. As Christmas comes closer, the time to think through, prepare and execute a gift for less money becomes more and more difficult.

While not everyone is crafty, self made gifts can go a long way to reducing costs. Gift baskets of homemade cookies or other selected items are easy to put together and can be made to fit the recipients particular tastes and likes. Another wonderfully simple gift is a photo of you and that person. By taking the time to consider if there are gifts that the person would enjoy that aren’t prepackaged at a store, you will likely be able to save money while giving a gift that is appreciated that much more.

An option that may be appreciated far more than a material gift by some people is giving your time. This can also be an excellent gift for those of you reading this article at the last minute that are in a panic and likely to buy an expensive gift with time running out. Simply take some nice quality colored paper and put together a coupon book for the recipient that they can redeem at any time. A coupon for a 30 minute back rub will always be highly regarded and it doesn’t cost you anything but your time. Add in coupons for a walk in the woods, a day at the beach, a game of tennis, a visit to a favorite museum, a picnic lunch or any other activity the recipient would enjoy and you have given a wonderful gift at practically no cost. Another advantage of the coupon gifts is that if there are activities that will cost money, they get spread out to other times of the year when money may not be so tight while making your Christmas gift last far longer than a single day.

In the same respect, but at the opposite end, you can give a gift of memories which will likely be treasured for a lifetime. Simply find a nice jar and cut different colored paper into small, note-sized pieces. Write a single memory you have had with that particular person on each sheet and place it in the jar. Continue doing this until the jar is full. Add a nice ribbon around the jar and you have a wonderful jar of memories to give.

Another option that can work well to save money with the right people is delaying Christmas until after the holiday. If there are gifts that you know will be greatly discounted in the after Christmas holiday sales, delaying the purchase will allow you to get the person more for less money. This can work especially well with children if you take the time to explain and give them the option of a lesser number of gifts on Christmas Day, or more (for less money to you) a few days after. Not only will the children understand the concept, you will be teaching them invaluable money management skills.

Planning ahead will also allow you to consider non traditional shopping sources to find that perfect gift and reduce your costs. If one or more of the people on your list is a collector of certain types of items, searching flea markets, discount shops and online auctions may produce something far more appreciated than a typical gift from the local department store at a price that is much easier on your pocket book.

Saving Money On Your Holiday Greeting Cards

Cards: As with your gifts, you should have a list of all the family and friends with whom your regularly exchange holiday greetings. In the same vein, the best way to reduce the costs associated with giving cards is to eliminate them. The computer age has made this more possible than ever. With email available and a large number of sites that offer free email greeting cards, you should first determine who on your holiday card mailing list it would be just as appropriate to send an electronic holiday greeting to. By doing so you eliminate the cost for cards, envelopes and postage. For those with long lists, it may even make sense to sign up with some of the premium electronic greeting card companies that charge a fee. Since their memberships are usually good for an entire year, you have also taken care of all your other holiday and birthday greetings.

While switching all your holiday greetings to electronic cards would be the ultimate goal for card savings, there are still probably a few people on your list to whom you will want or need to send a real holiday greeting. If you had planned ahead last year, you will already have a number of boxed cards that you picked up at a fraction of their price at the after Christmas sales last year ( if you didn’t, then now is the time to write a reminder on your calendar so that you will be prepared for next year). Even if you know you didn’t prepare, you should locate your holiday card box since chances are you will have a fairly large number of holiday cards from years past that you simply have forgotten about. If these are still appropriate, you don’t have to do any card shopping until the New Year when all the sales appear.

If you find that you do need to purchase some cards, buying boxed cards will save you significantly over individual cards. Where you shop for the cards will also make a difference. You can find virtually the same holiday cards at the large discount stores at a fraction of the price as you can at your local card shop.

Another option is to make your own cards. Depending on how artistic you are, you can make your own or if you are less so, using the scenes, pictures and photos from old holiday cards to create new ones. Find your favorite poem to write inside, or create one yourself. Having taken the time to create a card will be highly appreciated by most recipients in that it shows that you were will to spend valuable time on them.

For those who use the holiday season to catch everyone up on what has happened over the past year, a holiday newsletter may be appropriate. While most of these can be sent over the Internet which will again eliminate all the postage fees, the ones that can’t can easily be printed with a holiday background eliminating the need for a card. By taking the time to see where you can eliminate and reduce your holiday card costs, you should be able to cut this expense significantly compared to if you had gone to your local store and purchased cards for everyone.

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Are you paying for the same service twice?

Most households subscribe to cable T.V. A good portion of cable subscribers also pay an additional expense for one or more movie channels. It’s not unusual for these same families to rent movies from video stores and/or subscribe to a movie service via mail. In this scenario, there are now three resources included in the household budget for movie viewing entertainment. Which, by the way, is technically a discretionary expense, meaning that it’s not even a necessary expense. Although, your family may give some argument about that.

Necessary or not, it’s a good alternative to the expense of taking the family out to the movies. There’s no arguing that. One night out, for a family of four, could easily break the entertainment budget for the entire month. But, you can save even more by trimming down this expense to one really good service that seems to meet all of your family’s movie entertainment needs. List and analyze your movie viewing options. Determine which service gives you the most benefit for your money. Then, make an informed decision on which service to keep. Reducing this household expense could save hundreds of dollars per year.

Don’t pay for services that you don’t use or really don’t need?

This is most common with home phone services. Features like call waiting, caller ID, return call service, long distance packages, etc, etc, etc. are extra expenses that you could possibly live without. I’ve always wanted the convenience of caller ID but, my phone company charges a fee of nearly $8 per month for this convenience. Do you really need it? Eliminating little money leaks like this adds up to significant yearly budget savings. Most families have an answering machine to take messages. If a caller does not leave a message this means that it was probably a telemarketer, the call was not important enough to warrant a message, or the caller has intentions of calling at a later time. Review all of your household expense bills to see if you’re paying extra for services you don’t need. Eliminate extra services and the fees that go with them whenever possible.

Make every effort to minimize costs on essential household expenses.

Sometimes making lifestyle changes can reduce expenses significantly. During Summer months, don’t turn on the air conditioner until you just can’t take it anymore. Not using the air conditioner will save the most on home energy expenses. However, this may not be an option for those who have heat related, or aggravated, health problems. Many gas and electric providers offer energy efficiency evaluations for your house, free of charge. Take advantage of this service to see where you can make home improvements that could mean substantial savings in energy costs. They may also offer suggestions for lifestyle changes that can reduce energy expenses even further. During winter months lower your thermostat a few degrees and dress warmer if necessary.

Review, remove, and reduce expenses to stop wasting money and trim your household budget. Analyze each household expense for necessity and the costs associated with it. Make an effort to reduce each expense to the minimum amount possible, while still meeting your family’s needs. Before you know it you’ll be saving hundreds, if not thousands, of dollars on your household budget expenses each year.

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• You’d like to get your money under control.
• Want to be more financially aware
• Just getting by from day to day.
• Not be able to afford the things you need.
• Up to your limit on your credit cards.

The Seven-Step Approach

If you follow the steps outlined below, you will significantly improve your money habits and increase your financial well-being. You will be less stressed and therefore improve your physical and emotional well-being too.

Learn how to take control of your finances and get a clear understanding of where you are financially.

* Step 1 - What Are Your Money Habits? What money habits do you currently have? What is your spending pattern? Take stock of where you are now and you will start to understand what being in control means to you.

How does money or the lack of it affect your life? It’s your decision as to how you spend your money. If you are spending more than you earn – you have a choice, carry on and get into debt or stop. Spend money for short-term gain and gratification or spend your money on longer-term financial stability and for your future goals. Every time you’re tempted to spend money on a new pair of shoes, a meal out or a new outfit – think! How much more could that money be worth to you in the longer-term?

* Step 2 - What Does Money Mean To You? What’s stopping you from being financially free? Understand where your beliefs and money behaviours come from, so that you can address the underlying reasons for your bad habits and start to put in place some new ones.

You probably have some beliefs about money you hold today that developed through your childhood as you grew up. Beliefs based around what your parents, society and religion taught you about money. The way your parents dealt with money will affect the way you deal with your money.

* Step 3 - Get Organised! Develop a crisp, clear picture of your expenses and your income. Do this and you’ll be in better shape and have a clear picture of where you are.

The reason this is important is to work out whether you’re earning enough to meet your expenses. If not, you either need to a) cut your expenses or b) you need to earn more money. The reason people get into debt or overspend is because they are unaware of how much they actually need to earn.

Gather together all your salary slips, receipts, bank statements, credit card statements, details of loan payments, mortgage, your money diary, etc. Work out all your incomings and outgoings.

* Step 4 - Reduce Your Outgoings. Look after the pennies, and the pounds will look after themselves. Begin to look at ways you can reduce your outgoings and start saving.

Even if you’re getting by, you may be surprised at where your money goes and how much you could save with a little effort and some careful thought. Look at the items that cost you the most and see what you can do to reduce these first.

* Step 5 - Dealing With Debt – neither a borrower nor a debtor be. There’s no escaping the fact that we live in a consumer society where possessions sometimes seem to be everything. This can lead us to accumulate things we don’t actually need and run up debts we can’t afford. Credit is just another form of debt. It may seem like an easy solution, ‘Buy Now, Pay Later’ but how much do you really end up paying for that short-term pleasure?

If you’re in debt, then get clear on what your debts are. How many debts do you have? How much is your debt actually costing you? Decide that today is the day you’re going to take responsibility and you put yourself in a much better position to do something about it. You’re not the first and certainly not the last person to be in debt. As soon as you start to bust your debt you’ll become more financially free.

* Step 6 - Savings – speculate to accumulate. First create your Emergency Fund and then start saving and investing for the long term. Even if you don’t have enough money to invest you can at least start saving. Set up an automatic payment straight out of your account into a savings account.

Place it somewhere with easy access, preferably earning the highest rate of interest available. Never under the mattress! Keep 10% of your savings readily accessible for emergencies. As you build up your savings fund – move it into a high-interest, long-term savings scheme. Make your money work for you!

Your first savings pot should be your Emergency Fund. Aim to accumulate 3-6 months of your basic monthly outgoings that you need to survive. Should the worst happen and you lose your job, go sick for a period of time or decide to have a change of career, you will have a financial cushion to support you.

* Step 7 - Moving On – Good Habits. Keep yourself on track with some new money habits.

- Get organised and put a structure in place to keep you financially in control.

- Get all your regular, monthly expenses on direct debit – that way you won’t have to remember to pay bills, miss a payment, get unnecessary charges or risk getting cut off.

- Check how much you are paying for things on a regular basis. Check your bank statement every month when it comes in.

- Set aside a little time, every day, once a week or once a month to organise your finances.

If you follow these seven steps you should start to feel more in control of your money and be in a far better position financially. By reducing your outgoings you will be able to start saving and investing in your future. Money is the means to an end – it is not the be all and end all.

“…if you have food in the refrigerator, clothes on your back, a roof overhead, a place to sleep, money in the bank, in your wallet, and spare change in a dish somewhere… you are richer than 75% of this world.”

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Shaping up your finances is particularly important if you are experiencing a life altering experience such as a marriage, divorce, new baby, or any other event that changes your finances dramatically. Whatever the state of your financial life, developing a sensible household budget will allow you to be in charge of your money.

* How to Create a Simple Budget *

Your Cash Flow

The core of budgeting is for you, as a single mother, to see your monthly spending needs and habits. The purpose of a household budget allows you to track your personal cash flow. Your personal cash flow is how much money comes in and how much goes out.

Adding up your monthly income is easy, but totaling up all your expenses takes a little more effort.

First, collect all your bills, your credit card statements, your checkbook register, and receipts for your groceries, gas, or anything else you buy with cash.

If you haven’t been keeping good records, you may have to get a receipt of every dollar you spend for a month before you put together an accurate budget. Track your expenses by making entries in a notebook or learn how to it in Microsoft Excel. You can also use a money management program such as Quicken or Microsoft Money or Mvelopes Personal. They are really worth the investment, because they make the budgeting process easy and the software can often be found discounted at computer retailers or bookstores.

Now, divide your spending into fixed costs and variable costs. Your fixed costs will include such things as mortgage payments, rent, or loan payments. Your variable costs will include such things as clothing, food and entertainment.

* How to Stick to a Budget *

Once you are managing your spending, you can easily decide which costs as a single mother you can cut and which you cannot. In most cases, as soon as you see how much you are spending on your morning latte and breakfast items, you will be motivated to cut back. Stay motivated by setting goals.

Here are a few budgeting tips to get you started:

* Budgeting isn’t difficult, but getting started does take motivation. Promise yourself a reward for your efforts.

* Gather three months of bills or, if possible, all of the past year’s bills, and add up how much you spent every month. Divide them into categories such as housing, entertainment, and food.

* Take a good look at what you can spare. Entertainment expenses are easy to cut, but utility bills are not. Keep a daily journal of what you spend each day. This may sound obsessive, but it can be helpful. Once you know where your money goes, you can spot your unnecessary costs. It is really not that hard to give up lattes or bring your lunch from home.

* Pay bills as soon as they come in. Avoid destroying your budget with late fees.

* Decide what you can cut, and then cut it out. Track what you are saving, and you will be pleased with the results.

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