Aside from the revolution of online account services, auto bill-pay is possibly the coolest thing to hit financial institutions since cash. Especially for those of us who tend to procrastinate.
Most of my personal accounts are set up to auto-pay before they're due. But the due dates were different for most of my accounts. My phone bill might be due on the 1st of the month, credit card bill on the 15th, power bill on the 18th and so on. I was always worried that if the timing was off, or if my landlord didn't deposit my rent check right away, I would overdraft, even if I was within my budget.
What I'm now ( finally) doing is making sure that everything processes in the right order. My inspiration came from Ramit Sethi, author of the blog I Will Teach You To Be Rich. He wrote an article on this for brass in this year's Spring issue. Ramit also wrote a blog post about automating money earlier this year--and a guest blog on The Blog of Tim Ferriss--both of which I read and bookmarked for future action. Like most procrastinators, I didn't do anything until my unorganized timing fell on its face and I nearly overdrafted my checking account.
My paycheck was already directly deposited into my checking account. Now, I've set up automatic contributions to my emergency savings account and my IRA; these go out about four days after payday. Two days after that, loans, bills and my credit card take their share of my income. Unfortunately, I can't control when my landlord deposits my check, so I just have to deduct my rent from my balance until the check actually goes through.
Now, all I'll have to do is check back every few days and make sure everything is running smoothly, to keep surprises or mistakes from piling up. For example, a reader recently shared how an address change caused an automatic credit card payment to show up late (check next issue's brass|OFF for her full story).
Whether you're just starting auto-pay or have been doing it for a while, take some time to make sure your dates line up, so you don't have to worry about a bill-pay train wreck.
-Jennie
Jennie, I had to comment on your article about auto-pay. I am happy to find someone else who loves auto-pay. At my credit union, I learned how to master their bill pay service. I had no idea how fast and easy it was. I now have all my bills from my new house payment to my cell phone bill set up. Bill pay will show me the date when the company will receive my payment. They even allow you to have the option to receive your statement through their bill pay. Once you set that all up, the bill pay tells you when your next payment is due, when the last time you paid and then you can file your statements away. Now, I don't have to worry about any lost statements in the mail. I also, get email notifications when the bill is ready to view and when the payment is due. I would recommend to everyone to sign up for auto-pay or bill pay! It’s fast, easy and secure! -Jennifer Collaso
Jennifer, that's so awesome. Easy notification definitely makes it easy to keep an eye on outgoing bills. And recieving statements via email makes it so easy to organize everything. I love it!
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