I’m lazy. In my younger days, before my financial epiphany, I’d let the bills’ due dates go by while the money to pay them sat in my bank account. While I’m no longer that irresponsible, I still hate writing checks. Not only do they take time, it costs money to mail in the payments. I have set up my finances so that almost everything gets paid automatically.
Now that I’m no longer paying for school I write virtually no checks. How things get paid depends on the bill and the rules and policies of each company. Here’s how I do it.
1. Charge it automatically. Any bill I can put on my credit card is money in my pocket. First, it delays having to pay the bill. Second, I get rewards. Phone, internet, cable, newspaper, Sunpass (tolls) and web hosting show up on my bill every month and get paid without me having to do anything but check for accuracy.
2. Charge it manually. Some companies don’t do automatic charging to a credit card, but it doesn’t mean I can’t pay by credit card anyway. I go to the website or call the office to pay my Hospital Income and other fringe insurance and water and garbage. Easy!
3. Automatic debit from checking account. Every month my condo maintenance and the bulk of my insurances are debited automatically from my checking account. I also have a $30 payment for my Citibank Mastercard pulled, just to make sure the minimum is covered if nothing else (more on that later). Husband’s paycheck is direct deposited into that account, and I make sure that I deduct these first before paying any other bills. To be safe I put reminders in my calendar to make sure there is enough money available.
4. Manual payment from checking account. Credit card companies do not allow you to pay your bills with a credit card, of course. These I pay directly through their website each month. I love that my Citibank Mastercard allows me to have an automatic withdrawal done and still make a payment through the website. This means I’m covered if I should ever forget, but still allows me to pay off the balance on the due date (I don’t keep a balance on any of my credit cards). My Discover and American Express cards do not allow this (though they do allow multiple payments per month), so I have to just go to the website and pay it manually. All of them allow me to set up a future payment date, so I can pay it today and not have it post until the due date. I have reminders in my calendar that pop up every month to remind me, just in case.
5. Automatic withdrawal from my savings account. I have my mortgage withdrawn from my savings account. Why? Well, when I bought the house I was so paranoid about having enough money to pay for it I wanted it pulled out of my savings account because there’s always extra money in there. Always. Back then, though, I only had one savings account. Today I don’t keep a lot of money in that account, but there’s always enough to pay that mortgage the first of every month. And of course there’s a reminder, just in case.
Paying bills automatically or manually over the internet helps me stay current on all my bills, and helps me manage my money. What works for you?
August 25, 2008 at 7:00 pm
I’d actually suggest you change your strategy slightly on the auto-debit. Mistakes happen instantly on the biller’s end… resolution takes much longer. In the meantime, you’re out that money until the issue is resolved.
Instead, I use my bank’s bill pay feature. They write & mail the checks and I determine how much money goes to which vendor. I also can schedule recurring ones in there as well.
August 25, 2008 at 7:11 pm
Thanks for the suggestion. I’ve tried my bank’s bill-pay, and the payments got there late or not at all. Trying to get THAT straightened out was much more of a pain than getting things straightened out when on a credit card…