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How To Pay Your Bills Automatically

7 September 2010 No Comment

This guest post is by The Digerati Life, a general personal finance blog.

You barge into your house after another harried 12-hour workday, groceries filling your arm. Your cat jumps from the counter and wraps itself around your feet. Catching your breath, you set down your goods, set your keys on the counter top and fumble for the stack of envelopes you may need to get to. Slapping your forehead, you berate yourself for missing the cable bills again. Your spouse is not going to appreciate missing out on the games he’s been looking forward to all season.

At this point, you start wishing you could afford an accountant or a personal assistant to help you with the bills. But while you are tempted with the thought of delegating a chore such as paying the bills to someone else, how about choosing a pretty straightforward way to ensure that your bills get paid on time, all the time? Automated bill pay is something that you may be able to take advantage of — and it’s available in many forms. Your online bank has that feature, as well as other financial institutions with a presence in the web.

It’s simple to get yourself started with online bill pay. You could link your bank account to your credit card account or set it up to pay off any recurring bills you have. You can find out if your bank has an online payment feature which would enable you to transfer funds to pay your credit card and you should be all set. You won’t even need any reminders at all, as you can set up your accounts to pay on a schedule that you designate. There are online banking facilities that could handle prescheduled transactions. And these days, banks, credit card companies and other online entities are generous with providing you with alerts on the transactions you make online.

Here’s my own way of consolidating the bill paying process for the sake of convenience. I use my credit card as a buffer to make it all work. Check out my simple step-by-step guide to a nearly hands-free bill-paying experience:

  1. Enroll all your utility and subscription bills and put them on your credit card. If you’re like me and you’re fairly comfortable with using credit cards, then this makes for a really easy solution. Utility bills include your water and electricity bills. Subscriptions may include your cable and magazine subscriptions, as well as your mobile phone plan subscriptions. And don’t forget your Internet bills, if you’ve subscribed to an ISP service. If you use several credit cards, use one of your “safest” cards: meaning, it should have the lowest credit limit among your cards. This ensures that your other cards with higher credit limits can be freed up for your use with bigger purchases. Then, make sure it has cash back rewards, if possible.
  2. Link the “Bill Pay” credit card to one of your bank accounts. For better security, get a bank account that you’ll use solely for bill paying. You may also use this for your online transactions. Only deposit or transfer limited amounts of cash in this account, to ensure that your personal nest egg can remain safe from possible fraud, phishing or other security breach situations.
  3. Set your payment schedule on your bill pay account.
  4. Use direct deposit to make sure your bank account is automatically and adequately funded as well.

It’s that simple!

Now that you’ve automated your bill pay process, you may still want to keep track of your finances using alerts or a separate scheduler. It’s up to you to figure out how you’d like to stay organized, but I also use a few tools to manage my money, especially for those additional bills that are not on my automated bill pay schedule.

I’ve tried using software such as the following to manage my schedules and finances:

Things can be even easier when you can synchronize your due dates on your bills, so find out if you can make the appropriate arrangements with your creditors to make your scheduling more straightforward. Some companies you owe money to may be open to working with you in order to make the bill pay process easier. And when all is said and done, don’t forget to monitor and check if your electronic transfers have gone through.

Here’s to making life simpler, less harried, and to never missing another game again!

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