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How can I budget my money with online banking?


Online banking can help you meet your financial goals.
Online banking can help you meet your financial goals.
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Knowledge is power, and online banking provides up-to-the-minute information about the status of our bank accounts. But does the ready access to knowledge about our financial situation make any difference to our spending habits? Does seeing monthly expenditures online help us to save for our long-term financial goals? Or is the information discarded just as quickly as a paper bank statement?

With just a little bit of effort, online banking can help with setting up a budget and sticking to one. There are many programs that allow you to export your account information (have no fear -- there are safety measures in place) for the purposes of creating a budget. Two of the most notable programs are Quicken and Mint.com.

Let's talk briefly about how Mint, which is free, works: Once the site has access to your accounts, it evaluates how you spend your money and creates a budget based on this activity. You can modify the budget as you see fit, even accounting for highly personal situations, such as irregular income or sporadically spaced tuition payments. Once you've established your budget, Mint tracks every financial transaction against it, so with just a quick glance, you'll know that you're 35 percent over your monthly clothing allowance or that you still have $50 left in your grocery budget for the month. Such accounting will keep you brutally honest with yourself, money-wise -- it will be hard to claim that you can't meet your financial goals when confronted with how much your Starbucks habit is costing you.

Do you keep intending to beef up your savings account, yet always manage to forget to make your budgeted deposit? With online banking, it's easy to transfer funds between accounts, and once you send your allotted savings into a different account, you won't be as inclined to spend it. Some online banking programs, such as one offered by Wells Fargo, track your savings against a defined goal, such as buying a new home [source: Wells Fargo]. With these kinds of programs, you can receive progress reports and tips on budgeting to meet your objectives.

Lastly, online banking will help you identify the unnecessary charges that may be hurting your budget. With regular monitoring, you'll be able to notice unauthorized activity or fraud quickly. You can also use online bill payment programs to save on stamps and avoid late fees. And with quick access to your account balance, you'll avoid hefty overdraft fees.

For more on the benefits of online banking, see the stories on the next page.