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I balance my checkbook every week or so. When I'm not balancing all the time (as in daily), I still check my account online to make sure all is okay. However, once I deposit my check and pay bills I know in my head what is available and if I use my debit card, I'm pretty good at knowing what I have left.
Also, I am one of those people who keeps track of the groceries too. Usually I write on my list what each item costs (I estimate when I make my list as I know what most of my groceries cost, but sometimes I am surprised with an item on sale, or shocked with the increase in a price).
Sure, but these people are mismanaging their finances. They've created a budget where they are living paycheck-to-paycheck, this is a situation that was self-created. Its a bit amusing too that so many people use this as an excuse (seems, even you are) when incomes are all over the place in this country, that is you can always copy the budget of an equally sized family that is making less than you living paycheck-to-paycheck and end the month with some savings. After some time the savings, if invested appropriately, will pull up one's standard of living. The vast majority are just not willing to reduce their standard of living for a few years today in order to have a higher standard of living tomorrow.
Of course, the above doesn't apply to people in total poverty, but that is a small percentage of folks.
In terms of not saving fast enough, sure, a young family may have not had enough time to save money for irregular expenses. But this is only a valid excuse for the first few years of your life, after a few years credit card debt should be out of the question. I'd say the same for other consumer debts as well, but with a bit different time-scale. For example, you may need to take out a loan for your first car, but your second should be paid in cash. Almost everyone takes out a mortgage for their first-home, but one should never reset the length of the mortgage.
Only a small percentage of society will do the above though, despite it being extremely advantageous.
but if you're making only enough money to cover the expenses of getting back and forth to work and feeding and clothing your family, it's going to be tough to cut anything to build savings. i think those folks shouldn't use credit cards, but i think you're painting it as though everyone can save. some people are truly stuck paycheck to paycheck, but they are doing ok. maybe they could save a few dollars from each, but it's not that easy.
why would i ever pay cash for a car? talk about financial mismanagement! if i can get a 0-3% auto loan, i'd be nuts to part with that cash!
i also technically reset my mortgage length, but i did it to get a 1% lower APR, and i still make the same payment. so i disagree with your rules and your nevers.
Unfortunately, that sounds like how our government runs ITS finances, and it has a never ending supply of free money--us. There aren't a lot of people who put up a fight and say "NO, I am NOT paying you a dime." In fact, it's usually taken out before you even see it.
How does one keep track if pending transactions online? Online you can only view the transactions that have posted to your account, any transfers, online-payments, checks, etc will not show up until they post.
my pending transactions are there too. listed as pending. how hard is it to know if you made a $100 online payment that hasn't cleared yet? they only take like 2-3 days to clear.
who writes checks? lol
i dunno...i haven't balanced in at least a decade. it's all in my head. if i wanted to, i could enter an online payment or check into mint, and check there, to balance it. but if you check your account every other day, it's likely updated. i make my online payments the same day every month anyways. it's pretty simple.
i havent balanced a check book in over 25 years. no need to .
i highly doubt anyone can say they found an error in addition or subtraction in their on line statement. i think back to the days prior trying to find that elusive quarter all the time in an error i would make in my check book calculating it manually for hours on paper. i get one screen on my fidelity account that ties in every bank account,brokerage account, credit card,retirement accounts, 401k and every bill bill payed via check or on line...its one total view
i've audited banks' IT systems before. it's highly unlikely our math will ever identify an error that their systems and checks and balances doesn't identify. i can't believe anyone would keep a daily ledger of every transaction they make, and add it all up to balance.
I beg to differ, UserID. I've been managing my account very effectively this way for many years now. All of our checks clear on the first of the month. On the rare occasion that we must write a check for an unanticipated expense (e.g., for a repair), we simply transfer the money to cover the bill from our holding account.
We may be giving up rewards by managing our money this way, but our technique discourages frivolous spending, minimizes the risk of mistakes, and has allowed us to focus our attention on our investment accounts.
Furthermore, what we are doing is called creating and using a spending plan. Regardless of whether or not you use credit, you still need one to prevent overspending. Or do you just fly by the seat of your pants and let the dollars and cents fall where they may?
i do the same thing as you do but without writing checks or using debit (hardly ever). i use my credit to pay, get my cashback, and come out with a slight discount on everything i buy. it's a no-lose scenario. i have the same as you...a spending plan. and i don't exceed it. credit doesn't make me exceed it, it actually makes me come under it...because i budget at true cost, but i get 1.25% off everything, and then 5% off gas/groceries. so i'm always under budget, because of credit.
I never suggested that having a "spending plan" is a bad thing, but I don't get how such a thing would be effected by your choice of payment method. Personally, I find "spending plans" a lot like diets, they are just too rigid. I'd much rather focus on generally do the right sorts of things and not worry about the details. In the case of spending, that would include only purchasing the things you really need, will use, etc. Perhaps if I was strapped for cash a spending plan would make sense, but I'm not and I'd have to buy a lot of junk to over-spend.
That isn't what I suggested, rather, I suggested that you can't use online banking in itself to appropriately manage a checking account. Paying all your bills at once and making sure they are covered isn't much different than maintaining a ledger. I just prefer having a ledger, I'm not suggesting that is the only way to manage a checking account.
Anyhow, if you want to forgo the rewards that is your business, your reasons still don't make much sense to me.
this is amazing. i'm on the same side as you as far as rewards, but i see some people can't stick to their spending plan if given credit, so they don't use it. his answer about keeping his transactions more private is an answer also.
but as far as not being able to manage a checking account with online banking - i'm baffled. it's perfectly easy to manage it. you just need to write your pending payments down, and some of us don't. you need paper, we need our brains. it's ok. it's just different.
So you keep a mental ledger... I have too many transactions to do that, nor do I really have a desire to keep track of things mentally.
if you do most of your spending on a credit card, how in god's name can you have too many transactions against your checking account?
here's the basics of my monthly checking ledger:
bank account a (typically 4 deposits per month (2 from me, 2 from wife):
deposit exactly enough money to make mortgage payment each month. automatically set to make payment on 1st of every month.
bank account b:
2 deposits per month - paycheck (biweekly)
1 auto payment per month, 10th of every month
1 payment to gas/electric company, every month on the 2nd (never to exceed $200 - per my settings)
1 student loan payment - 19th of every month. same amount every month.
that's basically it. then, the only other transactions i have are if i hit the ATM for cash (rarely, if ever), and payments to my amex bill (which has details of every transaction if i ever need it).
that's basically 5 transactions per month, plus maybe another 5 in ATM and credit card payments.
Our government runs on credit, and never worries about paying its bills. Most consumers should. If you default on a credit card, you shouldn't be in collections for years, you should be in jail for theft.
... but i think you're painting it as though everyone can save. some people are truly stuck paycheck to paycheck, but they are doing ok. maybe they could save a few dollars from each, but it's not that easy.
What does it mean to be "truly paycheck-to-paycheck"? For the vast majority of folks living paycheck-to-paycheck is a self-created situation, that is, they are simply spending their entire paycheck would they could cut costs and save part of it.
Quote:
Originally Posted by bradykp
why would i ever pay cash for a car? talk about financial mismanagement! if i can get a 0-3% auto loan, i'd be nuts to part with that cash!
You're just getting suckered. Car dealers offer promotional interest rates by rolling the interest into the price of the car, if you were a cash buyer the dealer would give you a cash-bonus instead of the promotional interest rate. Usually they explicitly advertise both, that is something like "1.99% or $1,500 cash-bonus". It usually makes sense to take the cash-bonus even if you finance the car, otherwise you pay the interest regardless of whether you pay off the car earlier, etc.
This is not to mention that even at 3% it makes sense to just buy the car cash. It would take around 5~6% return to match an after-tax return of 3%. You're not going to find a 5~6% risk free return anywhere else.
Anyhow, you're debtor so naturally you disagree with what I'm saying, most don't have the discipline to do what I'm suggesting. But that doesn't change the fact that the benefits are huge when you compound them over a lifetime.
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