Online banking – a friend or foe? Almost everyone uses online banking, because of its advantages of being quick, simple, and easy. You have 24/7 access to your accounts from anywhere, it’s secure, and there are features and services to help you apply for loans, check your investments, and more. Most banks offer the online banking feature to their customers, but there are disadvantages to using this service. Remember, nothing online is fully secure (hello, identity theft?) and it is important to check if your online bank has a brick and mortar location and is FDIC-insured for deposits. Another valuable thing to keep in mind: not all online transactions are immediate. Many websites use the same business hours as their banks. Online banking has pros and cons when it comes to handling your money. Keep in mind that using this service shouldn’t become your only way to keeping track of your expenses and savings. Below are a few tips on budgeting and managing your online banking account.
First, online banking doesn’t replace the pen and paper method of tracking your accounts in a checkbook. Remember how I said not all online transactions are immediate? Actually recording your expenses, bills, and more in your checkbook will give you more of an accurate balance. For example, I use online banking to pay my monthly bills. Some are immediately taken out; however, there is one bill that takes a few days to show up in my account after paying. If I didn’t write down this bill in my check register, and only used online banking, I could easily forget about it and overspend, possibly leading to my account being overdrawn. To prevent a negative balance, set up your payments to be automatically taken out, when possible. Most companies will have some sort of system to create an instant withdrawal on the same day each month. This allows you the opportunity to budget and take into account when the payment will be taken out and how much. However, no matter how you decide to schedule your bills, always make a note of them in your checkbook. Remember to also include your other expenses, such as groceries, personal needs, etc., and your deposits. Using a checkbook will help you visualize everything going in and out of your account on an instant basis.
Another way to budget with online banking is by transferring money between your accounts. My online account holds my checking and savings. I can easily transfer money between one or the other. However, there may be limits on how many times you can transfer per month. Online banking also lets people move money into other accounts. For instance, parents can link their college-aged kids’ accounts to theirs and easily move money between them. The transfers are immediate and can be done anywhere. You don’t have to take the time and go to a traditional bank.
Lastly, some online banking sites have a feature for you to deposit checks without going to the bank. I have never used this service; however, you can take a picture of your check and upload it to your account.
Most banks have apps for their online banking sites. Managing your money through this type of banking can make it easier to budget your accounts. However, it isn’t for everyone. One thing to remember: online banking shouldn’t be the only budgeting method you use. A combination of the pen and paper method and online banking could be the key to efficiently managing your money.