Can You Go Completely Paperless with Your Finances?

This post comes from Sean T. Johnston at our partner site

They say that “cash is king.” But some people would like nothing more than to overthrow his majesty in favor of electronic payments. After all, cash is dirty, insecure and hard to account for.

For some, the personal check is still the standard way to pay for goods when you don’t have the cash and don’t want to use a card. But is it a really good idea to have a document floating around that has your name, address, phone number and bank account information?

As recently as a few years ago, it wasn’t really possible to go completely or even mostly paperless. Now, with the rise and ease of electronic payments, direct deposit, and with most vendors accepting credit and debit cards, it’s easier than ever to take paper out of the equation.

Are you a tech-savvy personal finance fan who’d like nothing more than to get rid of cash and checks? Read on. I’ll examine the most common instances of where money would need to change hands, and what your options are for going cash/checkless. From easiest to most difficult:

Getting Paid

If you aren’t on direct deposit already, chances are your employer would like you to be. It costs a surprising amount of money to print and mail checks. If you don’t want the hassle of making a trip to the bank every time you get paid, consider direct deposit. It’s a win for everyone.

Paying Bills

Most creditors have online payment options directly through their website. But that’s not always the case, especially if you’re dealing with smaller companies like medical practices or gardeners. That’s why online bill pay comes in handy. Not to be confused with online payments, online bill pay is usually through your bank and works just like a virtual checkbook. All you do is enter your payee’s information and your bank prints and mails a check from your account, directly to them. It’s a free service offered through most banks and they don’t even charge you to mail it.

While You’re Shopping

You’d be hard-pressed to find a company that doesn’t accept credit or debit card payments anymore. There is the occasional mom-and-pop shop or super-trendy coffee house that operates on cash only, but they’re the exception.

That said, there are a couple of occasions where cash is required. For instance, have you ever tried to pay for parking at a private lot or tried to pay for a hot dog from a cart outside of work? Pull out a credit card and you’re likely to get a laugh. Sadly, there are still a few transactions where cash is the only method of payment. That’s why I keep an “emergency $20” on me.

Gift Giving

Nothing beats the well-thought-out present that you wrap yourself. But in a world filled with obligations where you just need to stick something in a card and give it your wife’s friend’s kid for his middle school graduation, that’s not always an option.

Gift cards are always an option. But what if you don’t know the person very well? Sometimes you just can’t beat the ol’ standby of a few crisp bills in a card. Unfortunately, sending a PayPal or ETF to a child on his or her birthday is not exactly socially acceptable…yet.

Lending to Others

If you have a buddy who needs to borrow a few bucks, sometimes it’s just easier to give them cash or write them a check. Lifehacker has a great article on some of the more tech-savvy ways to send money to individuals. But, as they conclude, it can sometimes take a long time and be difficult to withdraw funds depending on which platform you use.

While it’s possible to take paper out of the vast majority of your transactions, we’re still not quite ready for 100%. Until all brick-and-mortar stores accept credit cards and giving someone liquid money is as easy as handing them cash, we’re going to have to keep cash and checks nearby as a last resort.

But if you think about the technological progress that has been made in the past ten years, it’s not difficult to imagine that we could live in that world, and soon.

What do you think? Do you try to keep cash and checks out of your finances? If so, what’s your biggest challenge?

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7 Responses to “Can You Go Completely Paperless with Your Finances?”

  1. Anonymous

    Employers need to provide pay stubs, regardless. Printing and mailing occurs, regardless.

    They want you on the debit cards because they receive kickbacks for it, or their payroll processing company does, cutting the cost paid to the company by your employer. And it’s nothing short of the extortion of your paycheck in debit card fees.

  2. Anonymous

    There is a third consideration too. Changing accounts is a long process when an account is wired up, so-to-speak. It was a two month process in my case. First you have to setup and fund a new account. Then you have to update all your service accounts to the new account. Then you have to wait for all the service accounts to cycle to insure all the changes were successful before you can defund and close the old account. If you’re doing this on your own time it isn’t too much of an issue. If, however, your account has been hacked and needs to be closed immediately it could be problematic.

    Today I keep a single account. The only thing I use the debit card for is to buy a 12 month Netflix gift subscription once a year and apply it to my account as debit/credit is the only option. If there is something I need to buy online either because it is the only place I can get it or it’s significantly cheaper then I’ll use the card for that.

    The rest of my bills I pay annually as well, but by money order rather than a check. The only two bills I don’t pay annually is my water bill and car insurance as they bill every six months. The other, like my internet, gas, and electric I pay 12 months ahead based on what I paid the previous year.

    Rather than complex, it is simple. Sure, I spend $8-10 a year on money-orders at Walmart, but people don’t get my account numbers. I don’t have to hawk my accounts to make sure things are going as planned. The rest of my day-to-day expenses are paid in cash. I have no desire to ever go back to paperless.

  3. Anonymous

    I used too. There was only my village water bill that I paid by mail, which I could have done through my checking account bill pay, but never set up.

    My take is that though the risk may be small, there are a couple drawbacks. One, we are giving up what was company provided records via printed contracts and paper bills. The second is error and fraud exposure. One company makes an error and debits your account for an amount greater than it should have and a domino effect can occur where because of the error your account is now short funds necessary to cover other incoming transactions. Fraud can have the same effect.

    In my case, I was fortunate enough that an erroneous gas meter reading never debited my checking account, but its occurrence was a wake up call to the trouble the slightest error could cause.

  4. Anonymous

    I still have several bills per year that cannot be paid online so checks are the only way to go for those. Also my very small employer does NOT offer direct deposit!

  5. Anonymous

    We definitely try to keep checks out of our stuff. For that, online bill pay is fantastic along with the ease of record keeping. That being said, we still pay cash for a number of things, especially to keep within our budget. Things like food and gas are mostly paid with cash. I try to always keep $100 cash hidden in my wallet for small emergencies.

  6. Anonymous

    Nope I can not go completely paperless.
    We pay our property taxes in person by check at the tax office when they come due.

    In person, so that our money gets the most interest it can up until the last minute.
    By check, because they charge 3% more to use a card.

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