In the last article, we discussed how to automate your investments, and today we will cover another easy step to improving your finances — automating your bill payments. I can’t count how many times I used to look at my online checking account and wonder aloud, “Where is that check from?”
Photo by CarbonNYC via Flickr
Why Paying Your Bills Automatically Makes Sense
We would get a utility bill in the mail, I write a check, and then I would check my account to look at our budget. Only problem is after 4 or 5 days I had already forgotten how much the check was and who I wrote it to. (At the time my bank didn’t offer free online check viewing and I didn’t want to have to check 3 different utility company websites to figure it out.)
One of the biggest hurdles for someone struggling with money to get over is paying their bills on time. We like to play the juggle the due date game and you can only keep that up for so long. Eventually you get burned and end up paying a late fee.
Automatic bill payment solves that problem immediately. You decide when you want the bill paid and — wah-lah! – no more worrying about writing checks.
To successfully use auto bill pay, you do need to have your financial house in order. If you’re living on the edge of overdrafting your account every day, then having a bill automatically come out of your account can crush you. That’s why I’ve put this tip in 11th article of the series rather than toward the beginning. Get your house in order using the rest of the tips I’ve sent you, then set up automatic bill pay to make sure you don’t waste any more money on late fees.
Some People Fight Automation
Bill payment automation seems like a no brainer to me. It takes a basic financial task off of your plate, but some people actually don’t like automatic payment.
The rationale is that if you never even look at your bill — you just notice the money comes out of your account — then sneaky charges can get past you. Your cell phone service provider might accuse you of sending a text you never sent, or your water bill might be a surprise $600.
Those are valid points, but I still think automation is the better choice. No one said you have to stop reviewing your bills when you automate the payment of them. In fact, I highly recommend you still look at all of your account statements to make sure everything is right.
But in most months I think you will find that everything is absolutely correct. Not having to get out the checkbook and wonder when the check will be cashed is well worth the small effort it takes to automate paying your bills.
Your To Do List
- Automating payment of your bills
- It will protect you from late fees and make your financial life easier to manager.
- It also takes a task off of your plate, leaving you free to do other things.
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He’s building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, and many others.