Nineteen Hundred and Eighty-X

Remember when you wrote out checks to pay your bills? Those little slips of paper you stuffed into an envelope and mailed off? (Don’t forget the stamp!)

Nineteen Hundred and Ninety-X

Remember when the “Debit Card” was invented? Remember how most stores wouldn’t take it? They called it “funny money.”

Remember when ATMs were going to replace banks? There was going to be one on each street corner (next to each pay phone.)

Twenty Hundred and X

Remember Microsoft Money? Quicken? Programs that enabled you to pay your bills over the magic of the interwebs? I used Microsoft Money to monitor my banking transactions, categorize my spending, set budgets, pay bills, and administrate invoices and payments. It really simplified tax-time.

Eventually, utilities  offered the ability to pay over the cell phone and the web. The gas, electric and phone bills were easy (and most were free) to check and pay over the phone and web.  So I shifted away from Microsoft Money’s bill paying feature for the convenience of paying by phone.

Life was good, until…

Twenty Hundred and Ten

No sign of flying cars, but most utilities have strapped turbo-jet-packs to their service “Fees.” Compounding the problem, Microsoft has discontinued their Money program, and Quicken went to a monthly charge (currently $9.95) to make payments through their software.

Companies have been raising their fees, or charging a fee where there was none before. My phone company, which had free phone-pay system for a while now, recently added a FOUR DOLLAR FEE to pay your bill over the phone.

Four.

Dollars.

Let’s add this up:

• Before: An administrative assistant opens payment envelopes, makes sure checks are properly filled out, matches them to customer account invoices. An accounting assistant keys them in to the ERP system, signs all the checks, and makes a  ‘nightly deposit run’.
• Now: Administrative and accounting assistants are replaced with one computer. Data entry is done by the customer, and money transfers directly into the business account. The company IT guy has one more computer to keep running /backed up  (for the same paycheck)

For this new system they ADD a fee? For a service that costs them LESS to operate? Never mind the fact that YOU are paying them a fee so you can pay them for their product/service to begin with. The price of their service should have decreased to reflect the decrease in operating expense. The price could have stayed the same, and no one would have complained.  They could have added a token fee of a dime or a quarter, even a dollar, and most people wouldn’t think twice. But Four Dollars? This works out to as much as %20 of some of my bills.

Why don’t businesses simply raise the price of their services? I would understand that. But to charge people MORE for a service that costs the business LESS to operate? That’s downright American. Who do they think they are? The Recording Industry?

Going Forward – 3 Methods I Use to Fight the Fees

I’ve decided not to tolerate unnecessary fees any longer. Here’s a handful of ways I have changed my system and saved myself over $400 per year:

1. No longer using payment types that require a “fee” – I will not pay fees to my utilities so that I can pay them… by phone or any other method. I actually considered sending them physical checks out of spite (even though those do set me back the price of a stamp.) Fortunately for them, my bank has a free online bill payment system.
2. Categorizing and Budgeting with Mint.com – I’ve read a lot of good things about mint.com, and the fact that they were purchased by Intuit (makers of Quicken) makes them even more attractive. Mint.com is a “read only” service, meaning it can only pull information from your accounts, it can’t move money around, or send money from your accounts. In that respect it’s very safe, but at the same time, it’s very limiting. If I trust a service enough to give them my account login credentials, then I would also trust them to make transfers at my request. So mint.com is worthless for bill paying and it won’t do invoicing, but it has plenty of features to help categorize my expenses for tax time, and set budgets and analyze spending patterns.
3. Invoicing using Freshbooks.com – I only have a handful of clients, so I can invoice using Freshbooks.com for free. Freshbooks.com is extremely intuitive and dead simple to use.

By using these three methods, I’m saving myself the cost of a Microsoft Money upgrade each year (around $80) and $32 per month in unnecessary “fees”. That’s not enough to save up for a flying car, but since I don’t think we’ll get any flying cars before the end of the world in 2012, I can still use that $400 for something to make the most of the short time left to this planet.

Got any other Fee Killing Tips? Drop them in the comments. And check out MSN’s list of fees that are even more outrageous than the pay-so-you-can-pay fees.

Yours Darkly,
-Z