It’s Never Too Late to Spring Clean Your Financial House

It’s Never Too Late to “Spring Clean” Your Financial House
— Straighten up credit–order your credit report at or call 877-322-8228.
— Dust-bust your bills–do you really need those premium movie channels?
— Shred documents you no longer need.
— Buff up beneficiary forms if you’ve experienced a marriage, birth, divorce, or death in your family.
— Tidy up insurance policies–ask your agent if you’re eligible for lower rates or discounts.

Who’s Liable if Junior Goes on a Spending Spree With Your Debit Card?

Kids these days. You hand them your three-and-a quarter-inch debit card and they take a mile. But, who is liable for Junior’s spending binge if it’s piled on top of authorized use of the card?

To understand liability with this issue, look at this example:

Mom Member gives her son, Sonny, her debit card and a list of items to pick up at the grocery store. He purchases everything on the list, but then takes a sharp turn off the path of being a good son and also decides to get some cash at the ATM, fills up his gas tank, buys pizza and soda for 20 of his closest friends, and purchases a new gaming system.

Sonny dutifully returns the card to Mom. Mom checks her account online a few days later and discovers Sonny’s shopping spree. She calls her credit union to report the “unauthorized” transactions. Is Mom entitled to get her money back? Under Regulation E, which regulates electronic funds transfers, probably not.

Reg. E says, “If the consumer grants authority to make transfers to a person (such as a family member or co-worker) who exceeds the authority given, the consumer is fully liable for the transfers unless the consumer has notified the financial institution that transfers by that person are no longer authorized.”

If Mom Member had notified the credit union that transactions no longer were authorized while Sonny was still using the card, she wouldn’t be liable for any additional debit card transactions after providing the notice. And, the credit union could have canceled or suspended the card to prevent any further misuse.

Alas, if Mom Member discovers Sonny’s misuse after the fact, it’s too late.

Fed survey shows mobile banking on rise | NAFCU

Fed survey shows mobile banking on rise | NAFCU.

Put Cash Flow on a Calendar

Money management, as with so many things in life, often comes down to timing. If you find yourself short of cash when bills are due, take some steps to match your cash flow with the calendar. Mileah tells about her system:

“I have an annual schedule of bills broken down into 12 months; each month is broken down by pay periods. We have one person paid every two weeks and the other paid twice a month, and this method helped me keep better track of what was due or coming due each pay period. I pay bills more often, but I use my credit union’s online bill pay and schedule automatic reminders with auto pays. I perform ‘maintenance’ on it once a month to make sure all expenses are covered and then review on paydays.”

Mileah created her system using Excel. She says, “We work on a very tight budget with less than $100 wiggle room each pay period. This helped tremendously. We found ourselves better able to live on our weekly allotted living expense.”

You don’t have to use a spread sheet—you can use any online or paper calendar large enough to note the bills and paycheck amounts, or even a legal pad.

Bill Hampel, senior vice president and research chief economist for the Credit Union National Association, Washington, D.C., says as many as two-thirds of consumers live paycheck to paycheck. You might benefit from being able to visualize your cash flow using some kind of calendar system. Your cash-flow calendar picks up where your check register and monthly statement leave off—they all work together.

More ways to match bills and paydays:
* Use online bill pay to pay large bills in chunks, say thirds or halves.
* If you have trouble coming up with full payments, set up a savings account just for bill payments; make consistent, automated deposits into that account and then transfer what you need to checking when the bills are due.
* Pay some bills early, from a paycheck when you’re a little flush. You might lose a tiny amount in dividends but the upside is better—no late fees, bumped-up interest rates, or damage to your credit score.
* Keep in mind that mortgage payments typically have a grace period—you might be able to pay 12 days after the due date and still be within a 15-day grace period, for example.

Think of the many benefits to Mileah’s careful planning: reduced or no overdraft or courtesy pay charges, no late fees for tardy bills, better savings growth because of consistency, reduced anxiety about having enough money to pay bills, and no unpleasant financial surprises. And keeping your obligations visible this way also can help you stick to your spending plan—you pretty much know your priorities at all times.