December, 2008:

I know I’ve mentioned on these pages before about how I enjoy all of the different seasons for different reasons – and December is no exception. During this month, aside from the obvious holiday celebration, my traditions include going to the Nutcracker with my wife and daughter at UIS, getting into the swing of high school basketball (just watched three more games last night!), getting together with family and friends, and of course, finishing out the business year and prepping for the coming tax season.

This month’s article has several ideas that you might incorporate into your financial world, using the internet. The internet has brought us many conveniences that we never could have dreamed of just a few short years ago, and I recommend taking advantage of them. Oh yeah, also, I’ve begun using Twitter for several things, including automatic schedule entry, todo lists, and posting the minutiae of life. You can follow me at twitter.com/BlankenshipFP if you like! If you don’t know what Twitter is, you should check it out – it’s a really neat technology that promises to be a big part of our lives in years to come.

Lastly, I wanted to clarify something about my last newsletter: You need to know that the recommendations I made about fiscal responsibility and the like are long-term recommendations for resolving economic troubles. I realize that in the short term, we’re all tightening our belts and such, but I think we need to make long-term commitments to live on less than what we make, work hard, and just be more responsible in a fiscal sense. Without making these sorts of moves, we’re doomed to continue this cycle of boom/bust and continue to experience this pain we’ve had over the past few months. I know we can do it – we’re all capable of applying our own brand of ingenuity and “elbow grease” to the broad economy. Let’s do this ourselves, and not expect the government to do it for us.

Web-based services are transforming almost every industry in the world, and certainly financial services is being transformed as well. Listed below are several ideas that you can use to improve your financial security and convenience by using commonly-available online tools and services.

Automatic Investment If you are receiving a direct deposit of a paycheck and/or Social Security check, you should also consider making monthly, fixed-amount investments automatically into your various funds. Done correctly, you could get a really nice habit going: taking advantage of dollar-cost-averaging with consistent gains, as well as having your distributions automatically re-invested.

Save For Retirement Many low-cost brokerages offer no-fee IRAs with no annual, set-up, or termination fees. Some of these include Fidelity, Schwab, TD Ameritrade, Scottrade, Vanguard, and T. Rowe Price. If you operate a small business, there are multiple opportunities to establish significant retirement savings accounts, such as the Solo 401(k). All of these accounts can be set up online.

Automatic Bill Pay Although this has been around for a while, many folks were slow to adopt automatic bill-pay, myself included. It is getting easier to use, and harder to ignore the benefits. Both Microsoft Money and Intuit’s Quicken provide online bill-paying services, as do most banks these days, and the number is increasing. Other bill-paying services include AOL, Bill Pay, Paytrust, Status Factory, Yahoo, and Yodlee.

Credit Reports With just a few keystrokes, you can get your annual credit report. AnnualCreditReport.com allows you to request a free credit file disclosure once every 12 months from each of the three consumer credit reporting agencies, Equifax, Experian, and TransUnion.

Electronic Wallet An electronic wallet is a term for services that allow you to make payments to virtually anyone or any company, as well as accept payments from the same, without providing that individual with your secured account information. Paypal is an example of an electronic wallet service, as are BillMeLater.com, Checkout.com, Google, and Neteller.com. Once your account is established, funds can be withdrawn automatically from your account (credit card, checking, money market, etc.) to use to pay for anything from flowers for your honey to a subscription to a magazine. Using a credit card to fund these purchases is the safest way (as opposed to a checking account),as you have more security in the transaction and recourse if the transaction doesn’t work out for you.

Personal Finance Information A great starting point is SmartMoney.com’s “Personal Finance” section. Its “Deal of the Day” will point you to savings on everything from seasonal shrubbery to private charter jet travel. Other services include Fool.com, Kiplinger.com, Money.CNN.com, and NAPFA.org.

Account Aggregation There are several services available to help coordinate your online accounts – banking, credit card, loans, 401(k), IRA, and other investments. These accounts also help you to automate your budget, schedule online bill payments, identify tax-deductible purchases, and store important documents (bank statements, checks, receipts) for easy reference online. Quicken.com offers such a service, as does Yodlee.com.

Research One of the greatest benefits of the internet is the plethora of information on all subjects, mostly for free. Financial information is another area that you can use the internet to help you find. For example, if you’re looking for a good rate on CDs, you can find that information at BankRate.com. If you’re planning to buy a new car, go to KBB.com (Kelly Blue Book) to find out about what rebates and other offers may be available on the models that you’re interested in.

This is, of course, just the tip of the iceberg, but you should have a few new ideas on how you can use the internet to your advantage, making your financial life more organized, automated, and hopefully profitiable. That’s all for now – until next time…