Decrease Clutter by Going Digital, Part 3: Bills

Tip of the Week, December 10, 2006

As if having to pay bills weren't painful enough, the clutter they cause--all those envelopes and inserts and sheets of paper--can make the process even more of a headache. Going digital with your bill paying won't solve the first part of that problem, but it can help keep bill-related clutter at bay. Here's a brief look at the ins and outs of electronic bill paying.

The basics
Many companies, from the phone company to credit card issuers to your local utility, now allow--and even encourage--you to pay your bills online or automatically. Depending on the company and how you handle your finances, you have a few options:

• You can receive notification by e-mail or postal mail when a bill is due, then go to the company's web site to pay it.
• You can set up automatic bill payments through your bank so that the amount of each of your regular bills is deducted from your account.
• You can set up automatic payments through your credit card so that other bills are charged to the card when they're due.
• You can sign up for a service (such as Paytrust or Checkfree) that will coordinate payments for all the bills you receive.
• You can pay your bills through financial software such as Quicken or Microsoft Money, which use a combination of the methods above.

The options you choose for electronic bill pay will depend on the bank you use, the bills you pay, and how comfortable you are with online transactions.

The benefits
When you get a bill in the mail, chance are you get a lot more than the bill itself: you also get a payment envelope, a handful of inserts, and perhaps an advertisement or two, all of which can quickly become clutter. Opting to receive and pay your bills electronically can help eliminate these annoying little stacks of paper from your life. (As an aside, even if you do continue to receive bills in the mail, you can almost always toss everything but the bill itself into the recycling bin post haste.)

Many companies with online bill payment programs also offer the ability to retrieve old bills on their websites, so if you ever needed a copy of a past bill, you could easily find it without having to keep the paper version on file.

A note of caution
Though many online transactions are very secure--some moreso than transactions made over the phone--it's always worth taking some steps to protect yourself and your information. When you sign up for any electronic bill payment, make sure the company clarifies how they'll ask you for payment, what web site you'll use to make a payment, and what information you might be asked for to identify yourself when signing in to the payment site.

I strongly recommend going to a web site directly when making a payment or sharing any of your personal info (bank account numbers, SSN, etc.) rather than accessing the site through a link in an e-mail message. Also, make sure the user names and passwords you use on these sites are difficult for others to guess. And never give out important information in an e-mail message; most reputable companies will only ask for this info once you're safely logged in to their site.

Getting started
Ready to give online bill pay a try? Start by making a list of all the bills you pay in an average six-month span--everything from the weekly and monthly bills (day care, credit cards, utilities, etc.) to those that are less frequent, like insurance premiums, seasonal expenses (snow removal, lawn care), and magazine subscriptions. Then do some research: how many companies to whom you pay bills offer online or automatic bill pay service? Does your bank allow you to pay bills online to other companies? Do you have so many bills that a consolidation service (like Checkfree) would be a worthwhile expense?

Once you decide on bill paying methods, take the time to sign up with the relevant web sites, keeping a list of the company, their web site address, the bill(s) you pay to them, how often you need to pay, and your user name and password for the site. Then set aside some time each month to go online and pay; if possible, consider consolidating your due dates (which many companies will allow you to do) so you only have to go through the payment process twice a month (say, the first and third weeks), rather than more frequently.

If online bill paying seems daunting, start small: pick one regular and relatively inexpensive bill (perhaps your garbage collection or utilities) and set up online payment for it. Once you get comfortable with the process (and start enjoying the lack of paper bills showing up in your mailbox), add another regular bill.

Before you know it, you'll be reveling in your clear desktop (no payment envelopes! no inserts! no ads!) and slimmed down files, and may even feel more in control of your finances than you have before.

5 Clutter-Free Holiday Gifts

Tip of the Week, December 3, 2006

December is a time of amazing generosity: we open our homes to guests, share with those less fortunate, and, of course, exchange gifts with friends, family, neighbors, and colleagues. Giving is one of my favorite parts of the holiday season, and I find sharing truly meaningful gifts to be an incomparable experience.

Of course, the aftermath of this giving bonanza is often a new batch of things that might end up as clutter in our homes or the homes of the people we've exchanged presents with. But that doesn't have to be the case; there are plenty of ways to give generously and meaningfully without over-stuffing. These five gift ideas let you show you care without loading your loved ones up with things.

1. Gift certificates--Though often derided as a bland, last-minute choice, gift certificates can actually be a great way of giving someone exactly what it is they want, even if you don't know for sure what that might be. Of course, even gift certificates require some planning and thought; you'll at least want to have a sense of where your gift recipient would be likely to shop or what her interests might be. If you're truly stumped, consider something general that's still likely to have broad appeal, such as a gift certificate for an online store like Amazon or a pre-paid credit card, which can be used almost anywhere.

2. Your time and talent--Chances are there's something you do really well, perhaps better than anyone else you know, whether that's making small home repairs, baking cakes, writing, sewing, or researching vacation values. This year, consider granting your giftees some of your time and talent--two hours of odd jobs around the house, for example, or a written record of an elderly relative's family remembrances. A gift of yourself is, by definition, something no one else can give, and your time and skills are likely to be more valuable than many other presents you could give.

3. Experiences--Think about what your gift recipients enjoy doing and consider giving them the gift of an experience. Whether it's a pair of tickets to an upcoming play for a theater lover, a series of cooking classes for a budding home chef, or a night on the town--complete with babysitting--for new parents, thoughtful experiences are things your giftees will be almost certain to use and appreciate.

4. Donations--Rather than pulling out your hair trying to decide what to get for the person who has everything, why not give the gift of exponential generosity? Donating to a favorite charity in someone else's name has multiple benefits: it lets you support a cause your recipient appreciates, allows you to avoid wasting money on token things that might never be used, and expands the scope of your gift so more than one person benefits. Almost every charity will happily send a card or note announcing your gift; you can also make your own explaining why you chose the cause you did.

5. Consumables--Finally, it's worth remembering that not everything that's actually a thing will wind up as clutter. Something your recipient can use--and use up--can be a great gift. Food and drinks like truly excellent chocolates or a nice bottle of wine, flower arrangements (or live plants for those with green thumbs), nice toiletries, and handcrafted candles are all thoughtful gifts that are unlikely to wind up in the back of a closet. The keys are to take the time to consider what your recipient might enjoy and then give accordingly--no chocolates for the cousin who's allergic to them, for example--and to go for quality over quantity.

As you shop for holiday gifts--or create your own wish list--consider including the five types of presents above. You'll be able to share in the generosity of the season without worrying about the clutter aftermath come January.

Decrease Clutter by Going Digital, Part 2: Paper

Tip of the Week, November 19 and 26, 2006

Last week, we looked at ways that going digital with your music collection can help you steer clear of clutter and enjoy your music more. But stacks of cd's and cassette tapes are rarely anyone's biggest headache; that distinction falls most often to papers, especially those we need to keep around for tax or legal purposes. This week, then, we'll investigate how going digital in the paper realm can make keeping the records you need less taxing and more orderly.

The basics
The most common reason by far that most of us keep papers such as receipts, bills, utility statements, and so on is because there's a chance the IRS would ask for them if we ever faced a tax audit. Indeed, recordkeeping is serious business, and it's important to have the supporting documents you need for as long as the IRS says to keep them. (For an overview of tax-related recordkeeping, see this page on the IRS' website.)

That said, how many of us would actually be able to get our hands on our tax-related documentation quickly and easily if we were asked for it? How many would need to dig through mountains of unrelated paperwork in the process? How many of us grit our teeth just thinking about tackling the file drawer/box/back of the closet where (we think) all of this paperwork is stored? Digitizing the records you need to keep can go a long way toward allowing you to comply with the IRS without having to give up your sanity in the process.

The benefits
U.S. law now allows digital copies of tax-related records to stand in for many of the things we used to have to keep on paper, including expense receipts, bills, and statements. Storing important documents like these in digital form not only saves a lot of space, it can also make it worlds easier to find what you need quickly and to keep your records organized. Plus, you might never again have to hand over a shoebox full of receipts to your tax preparer come April!

It's important to note that some documents should always be kept in their original paper format, including wills, titles, birth certificates, and many mortgage documents. While you can always create digitial copies of these documents, make sure to hold onto the originals in a safe place. For more information on what you should keep on paper, ask your lawyer, CPA, or tax professional.

Getting started
All you really need to digitize your papers is a scanner that will automatically transfer copies of whatever you scan to your computer. Of course, scanners vary widely in cost and quality; if you plan to use yours frequently--especially for creating digital documents--it's worth investing in one that's easy to use and will hold up over time. Ideally, look for a scanner that will produce PDFs of the documents you produce, rather than image files like .jpgs.

(If your paperwork is particularly receipt-heavy, you might consider the new NeatReceipts scanner. This gadget lets you scan your receipts, and it also comes with software that will analyze and categorize your expenses. Though, at $230, it's not cheap, it could be a worthwhile purchase if the thought of manually entering one more receipt into your accounting program sends you screaming--or if the very thought of an accounting program sends you screaming. See www.neatreceipts.com for more information.)

In addition to a good scanner, it makes sense to set up an organized filing system on your computer. Scanning documents and storing them in some dark and unknown corner of your hard drive will be just as maddening as trying to corral them all in an overstuffed filing drawer. Consider setting up a dedicated folder called "Expenses" (or "Important Papers," or whatever name makes sense to you); within it, create additional folders for the various types of documents you'll be storing there: credit card statements, receipts, paystubs, etc.

Maintaining your progress
Each time you scan a document, make sure both to give it a name that will make it easier to find (rather than the standard Scan001.pdf your scanner is likely to call it), and then to save it to the right folder.

You'll also want to be vigilant about backing up this information on a regular basis, whether on a disc, an external hard drive, or a USB key (which is about the size of your thumb and plugs into the USB port on your computer). Think of this as the digital equivalent of storing important papers in a safe or a locked drawer.

Once you've scanned your documents and stored them safely on your computer, you can get rid of many of your original papers. (Again, when in doubt about what you must keep in paper form, check with your attorney or CPA.) It's smart to shred anything that has identifying information on it--receipts that show your credit card info, statements that list account numbers, and absolutely anything with your Social Security number--rather than just dropping it in the recycling bin.

Digitizing your existing documents can be a great way of reducing your paper-based headaches while making it easier to find what you need when you need it. With a modest investment of time, tools, and effort, you might just find that you're able to empty out that troublesome file drawer for good.