One secret to being a more productive citizen is to find more time in your day to do other things. So, let’s start with the redundant task of paying bills every month. Why spend your valuable time on tasks that can be automated?
Consider the benefits of automating your recurring bills:
- Eliminates the risk of forgetting to pay a bill.
- No more late fees or disconnect notices.
- Saves the cost of postage, mailing envelopes, and paper checks.
- Saves time each month to focus on more rewarding money tasks – like earning it or making it grow.
Complete this exercise to move your finances towards cruise control. Make a list of your recurring bills. Now with swift honesty, quickly identify any non-essential spending that could be eliminated. If you identified any terminable expenses, take the fiscally mature step to remove the financial drain from your wallet. Next, let’s make moves to place your remaining bills on auto pilot. READY.
SET. Automated payments can be set up through your financial institution via bill pay or directly with the service provider. Select the option that works best for you. Gather a recent bill and enter pertinent billing information (i.e., account numbers, mailing address, etc.), pay amounts, and pay dates to ensure your payments will be received on time. Now, AUTOMATE!
Here are a few examples where automating just makes sense:
Mortgage/Rent
This is most likely the largest expense we have, and by default, a no-brainer to automate. Incurring late fees for rent or mortgage payments should be on your non-negotiable list.
For my homeowners, automating this cost could also result in additional savings. Check with your mortgage lender to determine if your monthly payment can be set-up for bi-weekly payments instead. The frequency of the bi-weekly payments result in one additional mortgage payment each year, which not only saves you thousands of dollars in interest payments, but will help payoff the loan sooner.
If your mortgage lender does not accept bi-weekly payments, there are companies who will manage this process on your behalf for a fee. I would avoid paying for something you can do yourself – for free. Perform a search on “bi-weekly mortgage payment companies” to research how they work and reasons you should avoid them.
Utilities – Electricity, Gas
This category can be a challenge due to the variability of utility expenses. Seasonal rates and weather patterns can create hardships on households if these costs aren’t monitored and controlled. To eliminate the unwanted surprise these bills can create, consider budget billing. Budget billing is an option offered by many utility companies to eliminate billing fluctuations and allow households to pay equal amounts each month despite actual usage. Your payments are typically calculated as the average of the last 12 months of service. Call your local service provider for program availability and determine if this is an opportunity to create consistency in your personal budget.
Credit cards
Whether you are working to pay these down or still operating in the credit card trap (i.e., using credit to make ends meet), strive to pay the balance of any new charges off each month. Not there yet? No worries, schedule payments to automatically pay at least the minimum balance. Don’t stop there. After everything else is paid, revisit these balances on a monthly basis to assess whether an additional amount can be made until your credit cards are paid off!
Cable, Internet, Telephone
For those who work from home or who have school-aged children with endless assignments, having access to the internet or a land line telephone is a valuable resource. And for my sports fanatics, the passion for our favorite teams is enough to keep us from cutting the cord on absorbent cable or satellite services. This expense category is usually the same amount each month, so go ahead and have it set up for automatic payments. Just be sure to revisit these services periodically to shop for the best deals or to negotiate perks (e.g., free preview periods, etc.) with your service provider.
Your Personal Savings Account
We’ve all heard the phrase, Pay Yourself First, but do you treat your financial future as a recurring expense? Short of winning the lotto, it is nearly impossible to accumulate months of savings without making it a priority. The average American household has less than three months of expenses in a savings account, and there are too many uncertainties in life not to have a financial safety net. Strive to save 10-15% of your monthly income. If you’re not there yet, start small with $10, $15 or even $20 per paycheck and watch it grow. Open a separate savings account that’s not linked to your checking account to reduce the temptation to spend your savings on a whim.
Other recurring costs to consider automating include auto loans, auto insurance, child care, club membership dues and home security services. The time invested in this exercise is well worth the effort as we continue to discover ways to invest our time and energy on money tasks that matter most.
I want to hear from you. What other financial tasks can you automate or delegate to save time? Share how automating bill payments have proven beneficial to you and your household.
