One of the simplest things you can do to improve your sustainably is to go paperless with your personal finances. Today’s technology makes it possible to almost completely avoid using paper. This can be good for the environment, since it saves trees and reduces waste. Going paperless isn’t something that you can just do, though. Plan ahead so that your switch to paperless personal finances is as smooth as possible.
Keeping Records When You Go Paperless
Obviously, one of the first steps you need to undertake when you go paperless is signing up for electronic statements. Banks and other financial service providers email these statements right to you. Insurance premium information, investment statements, bank statements and other documents can easily be delivered to your inbox. An increasing number of stores will email your receipts to you, if you are signed up with a loyalty program. But once the documents arrive, you still need to keep them organized.
Instead of printing them out (which defeats the purpose of paperless finances), save them in a special file on your computer. You can set up a folder on your computer, and set up sub folders to further organize your financial information. Tax deductible items can go in one sub-folder, while you can keep your investment statements and transaction records in another sub-folder. Add a layer of protection by requiring a password to access your main financial folder, and by naming it something inconspicuous. My financial folder certainly isn’t labeled “finances.” I also us a cheap data backup for my information so that it isn’t lost in a crash. We have an external hard drive for this purpose, and the most important items (digital copies of insurance policies, etc.) are on a flash drive in a fire safe.
With a go paperless records system in place, you can stay organized with your finances without paper — and you save room in your home since there’s no need for a bulky file cabinet.
Go Paperless: Get Rid of Checks
Paper checks are slowly being phased out of our society in the effort to go paperless. I still have a couple of clients that send checks through the mail, but almost everyone I work with either deposits the money directly into an account set up for that purpose, or sends me the money via PayPal. Then, of course, all my banking is done electronically, so transfers into various accounts are easy to manage without paper. Most traditional workplaces offer direct deposit options, so you never have to receive a check. On top of that, a growing number of banks are adding the ability for remote deposit. Just take a picture of your check, and send it in (although this just saves you a trip to the bank, rather than reducing the need for paper).
Automatic withdrawal can be set up for mortgages, auto loans, university student loans and other expenses. Online bill pay is available as well. You can pay your utilities, credit card statements and other expenses online, without the need to write checks, use envelopes and pay for stamps. Honestly, my life is much simpler without the need for checks: Payment goes faster at the store (and online), and I don’t have to spend as much time filling out the checks.
Protecting Your Digital Financial Data When You Go Paperless
With all those ones and zeroes flying around, you need to make sure that your financial data is safe. In addition to protecting your computer files, you need to make sure your anti-virus/malware software is sufficient. Also, don’t access your bank accounts and other financial accounts when you are public networks. Make sure your connection is private and encrypted before managing your finances electronically.
What are your tips for going paperless?
For those of you who own a Mac, one of the handiest tips for paperless finances is to use the Mac’s built-in PDF generator for receipts when you buy things online. It couldn’t be simpler: when you get to the last step of your purchase and the website shows you your receipt (or they email it to you), just go to the File menu, click on “Print,” and look for the PDF menu in the bottom left corner of the print dialog box. You’ll find several choices there; the one I use is “Save PDF to Web Receipts Folder.” This creates a PDF of the web page or email and saves it in a folder on your computer called Web Receipts. I use this for bank statements as well.
The save-to-PDF option is also useful for things like airline itineraries and hotel confirmation numbers; in those cases I choose “Send PDF to iTunes,” and then the next time I synchronize my iPad to my Mac the receipts are transferred to the iPad (you can read PDFs in Apple’s free iBooks app) and that way I can have all my receipts and other important travel docs in one handy place while I’m traveling.
Thanks for organizing some thoughts on how to go paperless and keep it secure. I know so many people who haven’t made the switch just because it is too much to think about. I personally am about half and half. I keep paper files on major receipts and a few other things. I am trying to motivate myself to create a system with my computer.
It is also important to back up your files. Preferably in 2 extra places, just in case your computer dies on you. You wouldn’t want to lose all of that information.
I have gone paperless outside of taxes. I am now with an online only bank and use checks only for my rent (though I am buying a home now and will be able to pay online going forward.)
My best tip is to take your old files and scan them in and shred them so you feel compelled to keep the rest going paperless. Being 50/50 is better than nothing, but going 100% is a commitment that you will stick to.
You have shared some great tips and I’m a HUGE fan of going paperless and automating my finances. It makes my personal money and life so much simpler.
Thank you for pointing out that it’s pointless to sign up for paperless statements or bills and then print them out (my sister does that and I keep telling her it defeats the purpose lol). I always do what you suggest, saving the important documents to a file on the computer so I can access if I need them.
I check the bills and statements regularly though, just to be sure the company’s know they can’t slip in extra fees or charges because I’m on autopilot.
I have been online only with the exception of rent for about 7 years now – it has been totally great (except when I forget to pay!). Its great saving paper and getting rid of the post office clutter.
Thanks, everyone, for the thoughts. I am almost complete paperless, and I love it. Thanks, especially, to Brad for that great Mac tip :) I use a Mac, and sometimes take it for granted that everyone just knows how to do such things. I love the PDF generator. But I didn’t think about the iTunes trick. That’s awesome. Thanks, too, for your great reminder, 20s Finances, about backing up your digital files. I also like Eric’s idea of scanning and shredding — total commitment! Also, thanks to Carrie for the valuable reminder that we still need to check the “official” statement. Just don’t print it out as you go through it.
I went paperless in stages and finanlly completed full stage paperless on Jan 1st.
Great post. We use Quicken to keep track of all of our financial data. It’s great for paperless statements because we can just download all of the statement data to the program. We can also do all of our planning in it too. We also pay with plastic as much as we can which allows us to use less paper money. Both green methods in my opinion.
To be honest I’m pretty bad about keeping records. I love going paperless, but sometimes it’s hard to deal with e-documents. Anyone have the same feeling?
The nice thing about e-documents is you don’t even have to organize them, because the search function on your computer should allow you to quickly retrieve whatever you’re looking for. I toss all my receipts and bank statements into one big folder; if I ever need to find them, all I do is a search for the bank’s name and the month, for example, or the name of the vendor I bought something for, and in about 2 seconds I’ve got the document I’m looking for. With paper files the same search might take 20 minutes or 2 hours.
@Market Maker: I think that krantcents has the right idea. Go in stages and get used to the feeling. Like Brad, I love how searchable everything becomes when it’s in an e-format. But it is a little bit hard to get used to at first.
Great post! Will tweet!
I have gone paperless for the most part. Not only does it reduce clutter, it feels great! :)
Its funny how we are all slowly going paperless. My cable company recently started charging $2 per invoice to motivate people to sign up for email billing.
Funny how different companies do things. We had a guest post very early this year about how the writer is punished for going paperless – they charge him for electronic invoices!
I don’t have any tips but I’ve been working towards going paperless for what seems like forever. I had boxes and boxes of papers and I still have so much. It’s definately something you need to keep up with. :-)