Blog: Minimizing Financial Clutter
52 WEEKS TO FINANCIAL ORGANIZATION – Week 5: Set up Automatic Bill Payments
There are several ways you can reduce the amount of time needed to pay your bills. The first way – and the easiest way – is not to pay them at all! Well, sort of. Instead of having to remember to write checks for routine bills, you can arrange to have your payments automatically deducted from your bank account or credit card account.
I'm sure I don't need to tell you that we all have many recurring bills – some monthly, some quarterly, and some semi-annually or annually. These are usually bills for non-discretionary purchases; in other words, for services we have to purchase because they are more-or-less essential to our lives. Examples of these recurring expenses include:
Gas & electricity Auto insurance
Heating oil Homeowner's or renter's insurance
Telephone Life insurance
Cell phone Health insurance (if not deducted from your paycheck)
Internet Storage unit rental
Cable or satellite TV Mortgage payment
Virtually all of these service providers offer automatic payment programs. They will still send you a paper or electronic statement when the payment is due, so you'll be able to verify that the charges are correct before the company withdraws payment from your account.
Setting up automatic bill payments will benefit you if
· you have regular income, or
· you always carry a high-enough balance in your checking account to cover automatic withdrawals, or
· you receive credit card "miles" for purchases made on your credit card and you have your regular bills automatically charged to your credit card. (Note: I am only suggesting this option for people who pay their credit card balances in full every month.)
Your Homework for This Week
· Pull a statement for each of your recurring bills.
· Check each statement for the procedure to set up recurring automatic payments. If a statement does not tell you how to set up automatic payments, call the customer service phone number on the statement.
· Complete the required form for each service provider. Don't worry – it is usually very simple! They will ask for your bank account number and the bank's 9-digit routing number, or for your credit card account number and expiration date, so have that information handy. They may also ask you to submit a voided check with your application.
· Mail or fax the completed forms to your service providers, or complete the applications online.
Note that it may take 1 or 2 billing cycles before your automatic payments begin to be processed by your service providers. During that time, you'll need to double-check your statements to see whether or not you'll need to send in a payment.
If automatic bill payment will not work for your situation, be sure to check this blog next week. I'll give you an alternative to automatic payments that will also save you time, while giving you more control over when your bills get paid.
posted on: 2/8/2009 11:30:00 AM by Katherine Trezise
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Minimizing Financial Clutter
by Katherine Trezise
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Katherine Trezise is president of Absolutely Organized, based in Baltimore, MD. She is president-elect of the National Study Group on Chronic Disorganization. Katherine holds a masters degree in business administration, is a Certified Professional Organizer® and a Certified Professional Organizer in Chronic Disorganization®. Absolutely Organized specializes in helping people organize their homes, paperwork and financial records to make room in their lives for the things, people and activities that are most important to them.