Every month, significant cash flow leaves your
bank account to cover your fixed expenses. Most households have at least a
dozen different bills to that they are responsible for monthly, including car
and home owner's insurance, car payments, mortgage payments, utility bills,
cell phone bills, home technology (phone, internet, cable) bills, credit card
payments, and more.
Bills may come out at different times throughout the month, and keeping track of them all can become complicated. If a payment is missed or late, there are consequences:
Bills may come out at different times throughout the month, and keeping track of them all can become complicated. If a payment is missed or late, there are consequences:
- Interest charges and late fees
- Poor credit rating
- Cancelled services
In order to avoid these issues, there is the option of
setting up bills with an automated
payment option. There are different methods that this can be accomplished,
for example:
- Setting up payments through your online banking system - if you use online
banking, you have the option to setup automatic bill payments to go to any
payee. You simply need to have a copy of your bill to ensure payments are
made to the right account. You can generally select the date the payment
needs to come out, and make it a recurring activity for as many weeks or
months as required. You do have access to remove or change an automated
payment of this type at any time. Paying your car insurance online, or any other bill using this method protects you from
missing any payments when they are due.
- Setting up automatic payments with the vendor - some companies require
that you setup automatic payments as part of the terms for providing you
with a service. For example, your mortgage lender may require that you
provide them with the details that allow them to withdrawal the payment
amount from your checking account on a monthly basis. When you use this
method, even if the amount of the bill changes, the full amount that is
due will be withdrawn. There can occasionally be a charge for setting up
payments through online banking, but having the vendor make the withdrawal
does not typically come with additional fees.
- Pay bills with USPS eBillPay - the US Postal
Service provides a service that allows you to setup all bill payees
online. The monthly payment amount does not need to be fixed each month,
as provided the accounts are setup correctly, the system facilitates the
process of issuing payment. The USPS system can also generate e-bills.
While vendors can also supply e-bills, this service ensures
everything comes from one place. The only catch is there is a service
charge. The first 6-months are free provided you need to make less than 20
monthly payments, but after that it is $6 per month for up to 20 payments.
Your financial standing is important, and using these
automated payment options can ensure that your bills are paid in full and on
time.
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