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How To Stop Infrequent Payments From Destroying Your Budget

By //  by Khaleef Crumbley

The topic of infrequent payments has been on my mind for the last couple of weeks now. My wife and I had a couple of infrequent payments, within our finances over the last month, and I even saw a video today from someone who’s debt snowball plan was sidetracked because of a couple of infrequent payments which she failed to account for in doing her budgeting.

Important Deadline

Infrequent payments, as the name implies, are any payments which are not due biweekly or monthly and so we tend to forget about them. These can be insurance premiums that are annual or semiannual, this can be quarterly tax payments, subscriptions to roadside assistance or magazines or other services, or even software license renewals.

So here are a few ways that I found works best for me to remember these infrequent payments, depending on what system I am using for my finances.

Set Up The Payment In Your Electronic Checkbook Register

I use Quicken Home & Business in order to manage our finances and in the software, I am able to go out into the future and set up a payment in the checkbook register. It is not as hard as it sounds – all you do is go to the first available space and type in the date, even if it’s a year in the future.

So what this does is every time you look at your finances, you are able to see this payment at the bottom of the current transactions, and you are even given what the available balance would be if that payment was to come out without any other transactions happening.

This is extremely helpful as you get closer to the payment date.

For a while I was actually using a Microsoft Excel spreadsheet that I set up to look like a checkbook. It will be no different in this case except you would have to cut and paste the transaction each time you wanted to insert more recent transactions. But the basic idea stays the same; you always have that transaction in your records so that as the date approaches, it becomes more relevant and it’s staring you in the face so you won’t forget.

Set Up A Recurring Expense In Your Software

Again, if you’re using financial software, you can set this up as a recurring payment the same thing should happen as in the case above when you manually enter it each time, except that you only have to enter it once.

It should still show up as you get closer to the date of that transaction and you should be able to modify your budget based on the reminder that set up the software. The great thing about setting it up this way is that if there are any changes to this payment (such as your auto insurance premiums increasing, decreasing) you can make the change one time and it will affect all future payments.

Set Up A Recurring Appointment In Your Calendar

Calendar Reminder

When I noticed that my wife and I were forgetting that we had a payment due every May for our auto club expenses, I decided to set up a recurring appointment on our calendar.

So this way every time we look at our calendar – when we look at May 23rd, for example – it always shows up that there is a payment due to the company that provides our roadside assistance.

With so many people using smart phones and also having Microsoft Outlook and other e-mail, scheduling, and calendar programs available to them, this can be done in a matter of seconds and you can have multiple people alerted to each payment due.

It was great the other day when my wife sent a message to me to say don’t forget that this payment has to be made as I was getting the same reminder on my phone and computer. So this way whether one of us switches phones, change email accounts or something happens to one of our computers, we still have the reminder in multiple places.

It will show up on both of my computers, my phone, my wife’s phone, and it will show up on her computer as well. There is a very, very small chance of all of those things failing at one time.

Set Up The Reminder Manually

If you don’t like any of these methods, you can always leave yourself a note. If you have a date book then you can go to the month before the infrequent payment is due and write a reminder for yourself telling you that the next month will include one of these expenses that seem to throw off most monthly budgets.

That way, not only are you reminded the day that the payment is actually due when you finally turn to that date in your calendar, but you’re also reminded in advance so that you have time to adjust your budget for the next month.

No matter which way you choose to manage your finances, make sure that you have reminders letting you know that the annual payment for your credit card, you quarterly insurance premiums, your gym membership, (this is actually an expense that should be put on the credit card because it makes it easier to cancel), or any other infrequent charge is due so that it does not throw off your budget.

 photo credit: Freedigitalphotos.net

Reader Questions

  1. What methods do you use to manage your finances?
  2. How do you keep track of these infrequent payments?
  3. Was there ever a time where you forgot to account for them and had to adjust your budget on the fly?

Filed Under: Budgeting, Personal Finance Tagged With: A Payment, Alternative Payments, Annual Payments, credit card, Future Payments, Infrequent, money, payment, Payment Date, Payment Due, Quarterly Tax Payments, Recurring Payments, Tax Payment

No More Checks For Social Security Benefits

By //  by Khaleef Crumbley

I’ve been waiting for this day to come for a long time (actually, it came a few months ago)! Effective May 1, 2011, applicants filing for Social Security and Supplemental Security Income (SSI) benefit payments must choose either direct deposit or the Direct Express® debit card. There will be no option to receive your Social Security benefits by check.

This means that the Social Security Administration will not have to bear the cost of printing, mailing, and replacing checks for beneficiaries and recipients. Those that were already receiving their benefits by check before May 1, 2011, will have until March 1, 2013 to switch to direct deposit or the Direct Express® debit card.

How To Receive Your Social Security Benefits Through Direct Deposit

Since you no longer have an option to receive your Social Security benefits via a live check, there isn’t much for you to do. If you already have a bank account, you can set up direct deposit of your Supplemental Security Income or Social Security benefit payments through your bank.

You can also call the Social Security at 1-800-772-1213. Just have your bank information and Social Security number available when you call, and they can set things up for you. Since there are more stringent regulations on when a creditor can garnish Social Security benefits, those who avoided direct deposit as a means to ‘hide’ their benefits, should no longer have to do so.

Are There Any Exceptions To Receiving Your Social Security Benefits Electronically?

Those who are 90 years of age or older may still choose to receive paper checks. This also goes for those who are able to document a disability.

In my mind, these are the people who would benefit from electronic payments the most – they may have trouble getting to a bank to cash their checks, and then trying to buy things in person with cash.

What Is The Direct Express MasterCard?

If you are set to receive Social Security benefits, and you do not enter direct deposit information, your benefits will be paid through the Direct Express Debit MasterCard instead of by a paper check. The card is just what it sounds like, a debit card that you can use wherever MasterCard is accepted.

Your monthly benefits will be deposited onto your debit card, instead of deposited into your bank account. You will receive a personal identification number (PIN), that will allow you to withdraw cash from an ATM or merchant who provides cash back.

You are allowed one free cash withdrawal per deposit at ATMs in the Direct Express network. Also, you are able to make free withdrawals at the teller window at any MasterCard member bank (most banks).

You can even sign up for low balance alerts by phone, email, or text message. Unfortunately, if you wish to receive regular monthly statements, you will have to pay $0.75 per month. Although, you are able to view the last 90 days of activity online (which may be enough for most people).

There are other fees associated with the card, which you can find here.

The Bottom Line Regarding Electronic Social Security Benefits

According to the Social Security Administration, 85% of those receiving benefits do so electronically. Therefore, this new regulation will have no effect on the majority of beneficiaries.

I wasn’t able to find an estimate regarding the amount of money that will be saved by moving everyone to electronic payments, but with only 15% of recipients receiving paper checks, the numbers can’t be that great. This isn’t going to be the move that saves Social Security!

As with any of the social welfare programs, there is a real danger of it not being around in it’s current form in the not-to-distant future. Therefore, it is imperative that we take full advantage of the IRA contribution limits, 401k contribution limits, and a 401k employer match, while there is still time.

The decision on how to receive these payments is a major issue for those with no other forms of income. For others who still have time, we need to do everything we can to avoid depending on Social Security benefits to fully support us in retirement! For those who believe that they have run out of time, here are a few late retirement planning tips to help you catch up.

photo by DonkeyHotey

The Post Was Featured In The Following Carnival(s):

Carnival of Personal Finance #327 – The Pirate Edition!

Filed Under: Retirement Tagged With: banking, benefit payment, business, debit card, debit cards, direct deposit, Economics, electronic commerce, electronic payment, electronic payments, finance, guide, labor, payment, payment options, payment systems, social security, social security administration, social security benefits, social security number, supplemental security, supplemental security income, welfare economics

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