Money Management

Should You Have An Automatic Bill Pay Setup

The easier you can make something, the more likely for you to do it. When it comes to savings the best thing to do is automatically have money transferred to savings. Well, it’s the same thing with bills.

I had a student of my free Jumpstart Your Financial Freedom eCourse ask me my thoughts on automating your monthly bills. I think it’s a great thing to do so that you don’t forget about your bills and get a late fee or possibly a utility cut off. Yea that’s an extreme but a late payment can happen. I’m not a fan of flushing money down the drain like a late fee, so I have a setup that I’ve been using successfully for the last year.

My Setup

I don’t have many bills that I pay directly due to having roommates. However, If I didn’t have roommates I’d just add those bills into the system. What I do is have a credit card, a secured card, as my exclusive bill card. I set up all of my reoccurring monthly bills to directly get paid with that card. This way I have one source to go through and can check all of the bills to see if any of them are out of the ordinary. If they are I check out the bill itself to see where I can cut down or to see if there’s a mistake I can get corrected.

Warning

I did mention that you should check your bills for a reason. This isn’t a set it and forget it type of system. This is a set it but keep an eye on it system. You don’t have to worry about paying them on time, but you do have to worry about if your bills are going up or not.

This set up helps me to keep organized as well as help build up my credit since the card stays active. Once I got all of my bills set up I be sure to stash the card away somewhere so I don’t carry it around with me. That makes sure I don’t use the card for other purposes.

What do you think about automatically paying your monthly bills?

Comments (14)

  • Personal Finance Buzz…

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  • Should You Have An Automatic Bill Pay Setup…

    The easier you can make something, the more likely for you to do it. When it comes to savings the best thing to do is automatically have money transferred to savings. Well, it’s the same thing with bills….

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  • Almost all my bills are on autopay, except my stupid water bill that you have to jump through hoops to set up.

    The only downside to autopay is for those that don’t pay attention to what they spend. When it is all done automatically, sometimes people can forget to look at those transactions and not pay attention to some of the unnecessary things they are really spending on.

    My cable and phone bills are paid by my credit card and I love it! Give me more reward points everyone!

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    • That’s another great point, getting rewards for autopaying your bills. Passive income perhaps?

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  • I have auto-pay set up, although not for everything. Only my student loans I have on auto-pay, everything else is paid online, but it’s paid when I say so.
    Everyday tips has a great point too – I used to not do auto pay because I’d never know if there would be money in my account on the day the bill was set to pay – I’m a little more sure of that now, but still not completely sure enough to hand over the reins.

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    • Same with me about not sure if I’d have the money. I’m more sure now so that’s why I dont mind doing it.

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  • I hate it because I can never remember what is supposed to come out. I do keep a buffer in there so it shouldn’t be a big deal but, even so…

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    • Yea that’s a down side. I set up the credit card so I’d get 1 single payment per month. That’s helped me out with that issue.

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  • Talk about can relate, I can relate. I don’t like flushing money down the toilet either, but this is exactly what has happen to me in the past. Late fees, late fees, late fees, they are enough to drive a man crazy!

    And good point, you cannot afford to set it and forget it cause the institutions make mistakes everyday and these types of mistakes can cost you some hard earned money.

    Reply
  • Automatic BillPay is a great way to go, but it is important to still follow up on it!

    I recently received a notice from my Auto Bill Pay that they are discontinuing the service in November. If I wasn’t paying attention, I could easily be late!

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  • Auto bill-pay is great with the caveat you just mentioned. I have had Verizon wireless almost totally screw me with an outrageous bill that was 4X my usual bill. All of it due to their mistake. I set email reminders before the bills actually get paid. This way I can see the amount of the bills before they get paid.

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    • Yea companies don’t care about mistakes unless you catch them.

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  • I am on auto pay for everything except the mortgage. I like deciding when the biggest bill will leave my account. Its due on the 15th but I can pay it on the 15th, or the 10th, or the 3rd all depending when the paychecks hit along with all our automatic savings.

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  • We haven’t set any bills up on automatic withdrawal. I prefer to have full control over my money and pay the bills on my terms. This way I also look at each bill closely before paying it, and am able to monitor my expenses.

    And… as weird as it sounds, I actually enjoy paying bills!

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