Cashing In Q&A columns

4 times to go old-school with your finances


When organizing your budget or keeping track of credit card bills, technology can get in the way. Here are four situations where old-school pays

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In a world of banking apps, automated payments, budgeting websites and electronic billing, you may be able to handle your financial life without touching any paper — or at least not much. There are situations, however, when it might make sense to dust off your pencil sharpener.

Even though emailed bills can prompt you to pay your debts, some consumers may need the paper envelopes that arrive in the U.S. mail as tangible reminders. Others may simply be more comfortable tracking their expenses with paper receipts and a notebook.

Here are four times when it may pay to stick with old-fashioned paper and ink:

Staying old school with finances: No app needed for that

1. When you’re creating a budget.
If you’re taking your first steps toward balancing your budget, paper and pencil may serve you better than an interactive financial-fitness website, at least initially.

“If you’re creating a budget for the first time … it’s nice to lay everything out in writing,” says Clare Levison, a Blacksburg, Virginia, certified public accountant and member of the financial literacy commission at the American Institute of CPAs. “Keep that document as a master that you can refer back to when you’re really trying to sort out your income and expenses.”

Kelley Long, a financial planner who’s also a member of the AICPA’s financial literacy commission, agrees. “Old-fashioned methods often work better for people who are just getting started,” she says. “You almost need to graduate from that to more sophisticated methods.”

The old-school advice also applies if a significant change in your life warrants retooling your budget. Once you have a good idea of your monthly expenses, adds Levison, “you can become more digital.”

2. For archiving financial documents.
Relying on your bank and credit card company to maintain your statements online, or in their archives, may not be as convenient as it seems. Financial institutions might keep only five years’ worth of statements and provide them only to current clients, notes Greg Plechner, certified financial planner and principal at Modera Wealth Management.

“The ability to log on and get my statement expires,” Plechner says, noting that there are times when consumers may want an older record but don’t want to go to the trouble of ordering it from a financial institution.

“If more banks and brokerages and credit card companies had bulk downloads and they had an unlimited timeline for keeping [statements], even for ex-clients, that would make a big difference,” he says.

Old-fashioned methods often work better for people who are just getting started.

— Clare Levison

One of Plechner’s client recently called and him for 12 months’ worth of statements for four accounts — at 15 pages per statement. “That’s a lot of printing,” he says.

Plechner prefers paper for his own key records. “For my important financial documents, mainly my bank and brokerage and credit cards, I get the monthly paper statements,” he says.

He likes to check the statements for recurring charges that he may not want anymore, and says reviewing documents helps him keep a handle on family spending. “I like the physical statement. There’s something to be said for having the ability to lay out the papers in front of you and review them,” Plechner says.

He also notes the “ongoing frustration” of creating and remembering passwords.

3. For receiving and paying bills.
Automatic bill payments may save time and make your routines easier, but there can be pitfalls to putting your payments on cruise control.

Levison, for one, is not a fan of automatic billing. “I think it makes people not check their bills, and you should always check your bill” to make sure you’re being charged correctly, she says. Automated payments may also not be helpful for self-employed people who are paid inconsistently and run into cash-flow problems, she adds.

Another aspect of automated payments doesn’t sit well with some consumers — the fact that when you sign up for them, you’re authorizing billers to withdraw funds from your bank or credit card account. “I don’t like to give people control over my account like that,” says Levison, who notes that you can set up your own calendar reminders — either electronically or on paper — to pay your bills.

Automated payments aside, many institutions offer customers the option of receiving electronic bills, but that paper-saving convenience may not be for everyone, either.

I get so much email now that it’s very easy for me to miss a statement.

— Greg Plechner
Modera Wealth Management

“I get so much email now that it’s very easy for me to miss a statement from a bank or brokerage firm or credit card company unless I’m specifically looking for it,” Plechner says. “It’s very easy to lose an email statement in the mix.”

Another potential problem: Consumers whose email addresses change will no longer receive their monthly statements if they forget to notify the bank or biller of the new email address, Plechner notes.

4. To avoid screen time or online risks.
Perhaps you’re skittish about handling finances on the Internet or don’t like to spend much time with technology.

“Apps are definitely not going to work for you if you loathe screen time … I don’t use apps myself,” says Long, who puts the phone away when she’s not working. “I really just think it’s important that you find a system that works for your habits and lifestyles,” she says. When people try to force a fit, “The electronics and bells and whistles fail.”

One somewhat low-tech way of budgeting for monthly bills is a two-account system, in which one account is used for set monthly expenses — housing, car payments and savings — and a second account for other, fluctuating costs, Long explains. People can directly deposit the amount needed for monthly expenses into the first account and place the rest into the second account.

“From our perspective I think the goal is really for people to get started now and make a financial plan that’s right for them,” says Joanne Kerstetter, spokeswoman for debt counseling service Money Management International.

“The key really is to keep it simple,” Kerstetter adds. Some people start using apps and programs “and they just get discouraged and kind of stop and get overwhelmed … but then again it’s personal choice,” she says.

Some consumers have security concerns about online finances, Kerstetter notes, suggesting that people use security software and password protection since mobile devices can be stolen.

You don’t have to go all or nothing with technology, of course.

Levison, who is mostly digital in her business, considers online banking a “fabulous invention” that people should use and check daily. A combination of old-school record-keeping and advanced technology is fine, she notes. “Whatever works best for you.”

See related:9 low-tech ways to manage money, credit, Financial planning options for the 99 percent, Beware auto-renewals’ endless charges

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