Sometimes a paper trail is the only way to find what you're looking for.
Sometimes, there’s just no substitute for paper.
The offer on your first home, with your signature written in ink at the bottom. Your passport. Your original birth certificate. The diplomas on the wall at your doctor’s office. The fact these documents are on paper makes them more real, more substantial, more official.
Be that as it may, more people are embracing the concept of paperless in various aspects of their lives. One of these is personal finances. Indeed, financial institutions have been promoting this service not only for its convenience to customers but also as a way for them to help “save trees” and protect the environment by reducing paper use. The latter may be a great selling point, but is it true?
While e-banking undoubtedly cuts down on the amount of paper documents mailed out to customers, its environmental benefits are not easily defined. There has been no empirical evidence that any trees are actually being saved due to this type of service. Moreover, the claim does not take into account important factors like the vast amounts of energy needed to power major data centers (like the servers used to store financial data). According to the EPA, this totalled 60 billion kilowatt hours in the U.S. between 2000-2006 alone, or about the equivalent of the electricity used by 559,608 homes in one year.1 This amount was expected to double by 2011.
But perhaps more unnerving to the average consumer than the ambiguous environmental benefits of going paperless are the concerns raised about the effectiveness and security of relying on digital media for their finances. Jakob Nielsen, a web-usability expert and author specializing in how people interact with technology said: “The online medium lends itself to a more superficial processing of information, you’re just surfing the information.” 2 This tendency to “read diagonally” when online means that you might skim over an important discrepancy in your bank statements or fail to absorb the real impact of your spending habits over time.
Receiving credit card statements and invoices by email might be a great way to cut down on time and save precious filing cabinet space, especially if you can pay them online as well. But there are also some potential trouble spots here. Messages can get lost in overflowing in boxes, or never even received due to outdated email addresses or overenthusiastic filtering programs. What’s more, some experts have put into question the protection offered for web-based financial transactions. Credit Card Assist lists a number of drawbacks with going paperless with credit card statements including the lack of physical records and communication proof in the event there is a problem, and an increase in identity theft related to online information exchange.3
Lack of physical records can also be an issue in dealing with other financial bodies, namely the Internal Revenue Service. While storage practices vary from institution to institution, banks rarely keep information for more than a few years and some just a few months. As pointed out by Eleanor Laise of the Wall Street Journal, “That means important documents may not be readily available when customers need them most. The Internal Revenue Service can generally audit taxpayers for three years after they have filed their return, or six years if income has been substantially understated.4”
Indeed, while there are benefits to digital communication, there are still many instances when paper is the best tool for tracking down what you’ve done and what’s left to do. Just think of the good, old-fashioned “to do list.” You can type one out on your PC, but these devices get turned off eventually and the list is gone. Out of sight, out of mind! But a strategically placed “honey-do list” is a constant and persistent reminder, improving the odds that items will get checked off. In fact, a survey conducted by lifehack.org showed that not only do most people use a paper to do list, but that paper is more than twice as popular as any other method listed.5
While going paperless in your life may be convenient for some things and help cut down on clutter, there are still some occasions where leaving a paper trail is the most effective way to stay organized and avoid problems down the road. Viewing your diploma, reviewing your bank statement, having a physical record of your current and past finances cannot be disputed when they are put on paper.
1 EPA Data Center, energy use:
60 billion kWh
2 What Gets Lost When our Finances Go Paperless, Barbara Kiviat
3 Pros and Cons of Going Paperless with Your Card Statements
4 Pushing Paperless: The Pros and Cons, Eleanor Laise. The Wall Street Journal, May 2, 2007.
5 Paper or Plastic? Managing Your To-Do Lists, Laura Stack