So far this little system I have created for paying my mortgage has worked well for me, or should I say it has, well, worked for me.
Before we get started you should know that I am not good with money. I'm getting better, but I am not good with saving or making smart spending decisions.
In order to keep my mitts off the money I need to pay for where I live I have devised a plan that involves two banks, three accounts and (hopefully) ZERO maintenance on my part. My "paycheck" is direct deposited every other Friday. My employer offers a system under which I can have those paychecks split up either by percentage or dollar amount or variations of both, and deposited into several different accounts on payday. In order to keep the money I need to pay my mortgage and my HOA dues OUT of my hot little hands, I have arranged that an amount equal to half of those two bills combined be direct deposited into an interest earning checking account (which we will call the "mortgage account"). In addition I have a very small percentage of every check automatically deposited into a savings account (which we will call the "never touch" account), and finally whatever is left over goes into my regular, daily spending, checking account (which we'll call my "everything else" account). Now I also have a 401k that I contribute to, but that is like invisible money to me, so it doesn't even really count till I turn 65 or whatever the retirement age will be in 20 years.
The genius here is that just about every bank offers an online banking product these days. These systems can be set up to automatically pay bills, or you can even have your mortgage payment sucked right out of those accounts through programs made available by most mortgage companies or just about any other biller. Either way it is an invisible transaction. Because I am not good with money I have set up my mortgage account to automatically cut checks to my mortgage company and my homeowners association on the 25th of every month. So between the direct deposit and the automatic check cutting, I never have to see, smell, feel, handle, even consider the payment of those two bills. It just happens. And because I am having my bank cut the checks, I have a (an electronic) paper trail I can follow should anything go wrong.
Side note here... when my bank sent me the ATM cards for my mortgage and my never touch accounts I panicked. Too much temptation! I couldn’t bring myself to destroy them though... just in case of an emergency or really great deal on QVC (KIDDING!) I wanted to be sure I could still access those funds if I HAD to, so I kept them. I can actually hear them calling to me from their hiding place sometimes. Urging me to use them to buy ROOMBA or another TiVo, or that flat screen that Wal*Mart has for under $900... but my willpower has grown since becoming a homeowner. So far I have been able to resist their siren songs, but for how long dear reader? How long?
But, I digress...
This genius direct deposit, auto pay system does have one drawback. After everything has been split up very little is left to go into the everything else account. Only about a third of my check. So far I have managed to keep my shit together thanks to limited use of credit, and some creative bill paying, but I'm not gonna lie, it's tight. In my last post I mentioned that I'd dipped below $100 in my everything else account for the first time in a long, long time. This system and my not being used to it was the cause of that.
It's all still very new, AND it's a work in process... I may have to do a little "tweaking" to get it just right, but in the mean time I'll let the bank robots write the important checks for THIS NEW CONDO, and I'll try to manage the little ones best I can.
Next time: the great paint experiment (or) how I learned to stop worrying and love brown