Step 15: Automate your Payments

When looking at all of your expenses in the various categories, you have probably become aware of how many different payments you have and to how many companies. Bills don’t just come in for your utilities and groceries, but also for bank fees, taxes and insurance, and even if you only pay them once a year, there are a lot of bills that need attention.

Many people spend a good amount of time “paying bills” each month and whereas there is an excuse to say that this is a way to more or less know how much you are spending and what you are spending on, there are two major disadvantages:

• Time investment: going through the various bills and writing checks or making payments online can be very time-consuming;
• Extra costs: bills not paid on time often result in extra fees.

It might be easy to dismiss both reasons, thinking you pay your bills in just half an hour, or that from now on you’ll make sure never to miss a payment. But chances are that there will be times you are too busy, away on holiday or dealing with a family issue when you won’t pay those bills on time. And “only half an hour” doesn’t sound like much, but what if instead you spend that half an hour on actually managing your finances and analysing how to meet your next financial goal?

For the above reasons you are going to set up automatic payments for any fixed or variable expense that allows you to do this. Since you are tracking your expenses, you don’t need to worry that you no longer know how much you spend on these various bills, as you have a system to register your expenses. That very same system also allows you to check that you are charged the right amount as soon as your bills or statements come in anyway, so let’s make sure to save you some money and time by automating your payments.

Step 15 – Automate your Bills – in detail

• Look at your expenses list and check which of your bills already have automatic payments set up and which don’t.
• For any bills that you pay “manually”, contact the company or go to their website to request the necessary paperwork to automate your payment.
• Do this for as many payments as possible, fill in the necessary forms and send them back to the company.
• For any automated bill, even though it now gets automatically taken out of your account, you should still receive a statement with the total you are charged, either by regular post or electronically. When you receive these, always make sure to double-check you were charged the right amount and then update your records and indicate that the amount was confirmed or cleared before filing away your statements.
• From here on, any bill that you receive that hasn’t yet been automated, pay it and immediately take action to automate the payment for the next time.

You should now never have to worry about scheduling time to pay bills or about paying extra fees for late payments. The time you save with this you can spend on making your finances even more awesome, the money that you save from not being charged late payment fees you can assign to goals that you are working towards to. Sounds like win-win situation to me..