Setting up your bank account to pay automated bill payments is a great way to systemize your financial life. Itís very convenient to know that you wonít forget to make payments, but there are ways to do it that work best. Letís look at these tips for automating your bill payments.
Go via Your Bank Account Not the Bill
The best way to set up bill payments is via your bank account. This gives you maximum control over the payments. Some banks will give you access to an "e-bill" once you enter your billís account information into the system, but itís not necessary. If they have the option to pay a bill via the system, you can do it with or without an e-bill; just set up the minimum payment or whatever payment you have budgeted for the bill.
Use the Billís e-Payment Options Sparingly
Some of your bills will come with an option to pay the payments via their system automatically. Use these only when it pays off to do it in terms of lower interest rates, ease of set-up, or something that makes you feel itís worthwhile. Itíll take longer to cancel the payment, and youíll need to take an extra step when you reconcile everything or have a need to cancel payment. So ensure that you note down how that bill is paid, how much, and when.
Ask for Equalized or Budget Billing
For some of your bills, youíre going to want to ask the account if you can get a standardized or budget amount that is the same each month. Some utility companies can do that, as well as other types of bills. This will make it easier since you can pay the same amount every month for the bill, equalizing it out every six months or so for under- or overpayments. Sometimes theyíll require auto withdrawal for this, so read the advice in the section above.
Deposit Extra Money
It helps if you know exactly how much will come out each month for your bills, of course. However, you still want to deposit about 20 percent more to cover for anything unexpected, since some of your bills probably vary in amount each month. Remember that all the bills will not come out right after you got paid, so you always want to keep a positive balance.
Pay Yourself Too
Even though itís to a "bill," letís get something straight about money. If you donít pay yourself, youíre not going to get ahead. Taking control of your money means that you pay your bills, but you also pay yourself some spending money so that you can enjoy your life within your means to do so.
Automating your bills can be a lifesaver for busy people who have the money to pay their bills but who are often so busy they forget. But itís also good for people who have less money and are having trouble balancing all their obligations. The act of setting this up can open your eyes to the possibilities and potential that your future holds.