If you’re like me, there are few things you hate more than paying bills and balancing your checkbook. I used to spend hours every week writing checks, balancing the checkbook, and driving to the post office. I had an elaborate system to make sure that bills were paid on time. I also hand typed all of these transactions into Quicken so I could keep track of spending. It truly sucked, but there is a better way!

Step one: Paper or plastic? …plastic.

Ditch the paper and start using the plastic. Paying by credit card or debit card not only cuts down on the amount of useless clutter you carry with you, but it will give you a means of more easily tracking your finances. (More on that later.) There are always going to be a few places where we have no choice but to pay by cash or check. But you should be able to switch to plastic for most transactions.

Step two: Stop paying your bills, your computer can handle it.

Once you have gotten rid of the cash and checks for the most part, it’s time to make a list of all of your recurring bills and figure out how to pay them automatically. Most companies have a link on their website that walks you through the process.

For those companies that don’t yet offer this service (get with the times people), you may have the option of using your bank or credit card company to set up a payment that is either electronically transferred or physically mailed. This will only work if you have a set amount that you pay each month (i.e. daycare is always paid x on the 1st and 15th of each month).

You may be saying to yourself, “This makes me nervous, I want to make sure I have enough money to pay my bills each month. How will I keep track of that if it just happens on its own?” This is where step three comes in.

Step three: Would you care for a Mint?

This last step is the most important. Run, don’t walk to Mint.com and set up a free account. Once you have a Mint account, you’ll need to enter your account information for each item that you need to track (checking, savings, credit cards, etc.). This may make some people nervous, but it is required for the magic to happen. I have been using Mint almost from the beginning and I can say that I have not had any issues with security, nor am I aware of any that others have had. Mint uses bank-level encryption and has over one million customers who have entered this information.

Once you have all of your accounts entered into Mint, your transactions and account balances will start flowing in. Mint has gotten pretty good at guessing which category to put your transactions into, but you’ll want to monitor this a bit and “train” Mint where things go at the beginning. The fact that you’ve started using credit cards and debit cards for most of your transactions will help, since they will have merchant information with them that aides in automatic categorizing. Checks will show up as “Check 2210″ and cash transactions don’t show up at all.

Now that all of your transactions are being categorized, you can use this to set budgets (Mint will ever do this for you based on historical information), view spending by category, etc. You can also set up alerts that are sent by text or email. These include high spending, low balances, over budget, and many others. Mint will also send you regular overviews. They can even notify you of fees (such as late fees) charged to your account or when your credit card rates go up.

You can also track investment accounts and see how much you owe on your mortgage. The result is a complete financial dashboard that gives you current information and shows you exactly where you stand at any point. You can see you current cash reserves (checking and savings minus credit cards) and your total net worth. The best part is that after initial setup, all you need to do is check in on it once in a while. No data entry!

All of this can be viewed securely online, on their mobile website, or from their free iPhone app. You can have this info with you anywhere. Mint is supported by companies whose products are recommended to you as ways to save. They may recommend a credit card with a lower APR or a savings account with a higher interest rate.

Act today! Follow these three steps and soon you’ll wonder how you ever did it any other way.

Originally posted at uselessclutter.com

Tags: Automation, finances, paper reduction