Going paperless

Sidenote: I'm having trouble staying focused today...

Today's get rich scheme will serve several purposes:
1. it will save trees by eliminating paper bills
2. it will allow you to ignore paying your bills
3. it will hopefully eliminate overdraft fees and late fees from your accounts

Alex and I have been living about a year with our finances combined. We've been working off of the same budget, and have worked to combine our credit cards into one low monthly payment and interest rate. We've just committed ourselves to set up a long-term financial plan. I think this paragraph could be its own post, so I digress for now. The point is we share our bills, and have several that recur every month.

What we've done is open our own joint checking account. This account will be for regular monthly bills only, but these do comprise the majority of our paychecks every month. First, we'll take all of the monthly bills from the budget. Everything from gasoline to rent to cable to student loans to food. We've been running this budget for a year now, so we've pretty much figured out how much we spend on the monthly bills. I add all of this up, and that's what we have to put into this account on a montly basis.

The next step is to add the buffer. The current budget system will work for now, but I want to add $500-$1000 to this account. If a heating bill accidentally spikes next November and is automatically paid, I want to make sure the account is overdraft proof.

Next, we automate the payments. We add my monthly income to her monthly income and subtract out the bills. This leaves us with our spending money. Divide this in half, and you get my share and her share. Take that from each of our salaries, and you get how much each of us should contribute to the regular bills fund. Hm... time for a hypothetical:

• Bills are $1980/month. I make $2000 + she makes $925 (she's still in school) = we make $2925. Take out the bills, we've got $945/month, or $472.50 each.
• I get paid bi-weekly, or approximately 2 times per month. Since I get to keep $472.50 per month, this means $236.25 per paycheck. I make $1000 per paycheck, so I direct deposit $763.75 into the joint account every payday. The rest comes to me in paper check which I can cash, deposit, save, invest, hide, spend, burn, bury or eat.
• Similarly, she gets paid every week, or $231.25 per paycheck. She also gets to keep $472.50 per month, or $118.12 per paycheck. Just like me, she direct deposits the balance $113.13 every paycheck, and hides the rest in an account to buy me a fishing trip to Montana for our honeymoon.
• So if you add my 2 payments of $763.75 and her 4 payments of $113.13 you get $1980.02, nearly the exact amount of our bills.
• With some attention paid to the timing during startup as to not overdraft, we then create automatic bill pay for every one of our bills on the list. Voila!! No more paper bills, overdrafts, or stamps! PLUS! Our weekly "take-home" pay is exactly the same every week, so we get used to exactly that amount of fun-money. If we run out, tough luck. Go buy some Bologna for sandwiches instead of eating out.

Additional comments:

The montly bills also include a debt payment bill which is much more than the minimum balances on our debts. I'll talk soon about our debt repayment plan, and why we pay what we do.

The montly salary is 4-week's paychecks, NOT 1/12th of a yearly salary. This means at the end of the year you end up with 4 additional weeks' worth of bills left in your account. (12*4=48, but 365/7=52) Check this every 6-months to a year, and move it into a higher-yield savings account.