Setting up online banking can make a personal budget easier to manage through the use of multiple accounts or expense categories with the same financial institution (for expenses like utility bills, vacation accounts, retirement funding accounts, etc.). Some people find that by moving money out of a core checking or savings account they are less likely to spend money that is budgeted for a future expense. Also, some personal finance software programs (such as Quicken) can be linked directly to your online accounts to provide real-time analysis of all your balances and cash flows.

Once your bills and vendors are initially setup for online bill payment (and most large companies will now allow payment via this method), payments can be made electronically and instantly. You can have the payment go out on pre-determined dates (as in every month on the 15th) or simply log into your account each month and manually trigger the charges to your accounts. Either way, there is no postage to pay - and you can see the effect on your account balances immediately.

People may find that online banking makes sticking to a budget easier because you can easily sort payments to see how much was paid to specific budget categories like electricity, cell service and health care. This saves time and confusion from sorting through months of paper statements and allows you to compare spent amounts with budgeted amounts - so your budget resembles your real life as closely as possible.

For those who use budgeting with their investing, online banking can assist in transfers from banking to investment accounts. Again, a key feature here is moving money "out of sight" and directly into its budgeted purpose. Most brokerage firms will allow you to make automatic transfers to and from an investing account, so long as you have liquid assets like cash or money market funds. Many brokerage houses even offer basic banking services such as checking accounts, which you may want to consider if you are making regular cash transfers into investing accounts.

On the whole, online banking should be comparable or cheaper than standard banking. You'll want to be aware of any extra fees that exist for maintaining several accounts with the same institution, but most will offer free checking if you set up direct deposits for your paycheck.

Some people worry about the safety of online banking, but strong security measures are in place at nearly every major provider. And at most commercial banks, customers can always choose to walk into a brick-and-mortar branch to bank if they have a problem with online services or would like to talk with a bank employee in person.

To learn more about online banking, check out Keep Your Financial Data Safe Online, Choose To Beat The Bank and The Evolution Of Banking.

  1. What are the pros and cons of online checking accounts?

    Learn about the ways an online checking account can save you time and money, but understand the drawbacks before signing ... Read Answer >>
  2. What US banks offer free checking accounts?

    Quit wasting money on monthly fees associated with your checking account and get a free checking account from reputable national ... Read Answer >>
  3. Why should I bother creating a budget?

    Creating and using a budget is a valuable tool for all demographics; it's not just for those who need to closely monitor ... Read Answer >>
  4. What is the most effective way to write a successful budget?

    Learn the best way to create a successful budget. Learn how to cut unneeded expenses without impacting what you need for ... Read Answer >>
  5. What is the best software for calculating the cash budget of an individual?

    Explore the options and features of several leading personal finance tools to find the best software for calculating your ... Read Answer >>
Related Articles
  1. Personal Finance

    The Pros And Cons Of Internet Banks

    Learn how internet banking services stack up against those of their brick-and-mortar peers.
  2. Personal Finance

    3 Alternative Budgeting Styles: Which One Suits You?

    Not everyone is cut out for online or heavily-involved budgeting. Here are some budgeting solutions.
  3. Managing Wealth

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
  4. Trading

    Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.
  5. Financial Advisor

    Explaining Clients Why They Need a Budget

    The truth is that budgeting isn't just for times when your money is tight or your life is undergoing a major transition. Budgeting is for everyone, rich and poor alike.
  6. Personal Finance

    How To Break Up With Your Bank

    Whether you're moving or have just found a better no-fee plan, find out how to switch banks with ease.
  7. Personal Finance

    Online Banks: Lower Costs And Little Sacrifice

    For many, online banking has become a day-to-day routine. Still, there are some holdouts who refuse to accept the method.
  8. Investing

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  9. Personal Finance

    Choose To Beat The Bank

    From internet banking to credit unions, it's in your power to cut fees and maximize service.
  10. Personal Finance

    Handling High-Yield Savings Accounts

    Is this the savings route for you? Read on to find out what these accounts have to offer.
  1. Online Banking

    The performance of banking activities via the Internet. Online ...
  2. Budget

    An estimation of the revenue and expenses over a specified future ...
  3. Automatic Bill Payment

    A money transfer scheduled on a predetermined date to pay a recurring ...
  4. Chart Of Accounts

    A listing of each account a company owns, along with the account ...
  5. Checking Account

    A transactional deposit account held at a financial institution ...
  6. Savings Account

    A deposit account held at a bank or other financial institution ...
Hot Definitions
  1. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  2. Nest Egg

    A substantial sum of money that has been saved or invested for a specific purpose. A nest egg is generally earmarked for ...
  3. Denial Of Service Attack (DoS)

    An intentional cyberattack carried out on networks, websites and online resources in order to restrict access to its legitimate ...
  4. Perkins Loan

    A loan program that provides low-interest student loans to undergraduate and graduate students who demonstrate exceptional ...
  5. Wealth Management

    A high-level professional service that combines financial/investment advice, accounting/tax services, retirement planning ...
  6. Assets Under Management - AUM

    The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked ...
Trading Center