I recently went back to full time work outside the home, after a long time (over 10 years)! Last time I worked full time I was single, now I have 3 school aged kids, and I am continuing to do some additional work on the side. So life is full and busy, and staying on top of things is more important than ever! One of the things I do to make life easier is to automate bill payments.
How Does Automatic Bill Paying Work
All, yes ALL OUR BILLS (except one) are paid by automated bill payments. They are either paid by direct debit or scheduled transfers. I don’t use a program for automatic bill payments, this is simply the system I have set up and use for our household bills.
I am SO glad that in the midst of this crazy full season I don’t need to keep track of any bills and make sure they are paid on time. Read on to find out how automatic bill paying works…
Bill Payment By Direct Debit
Some of our bills (gas, housing rates, building insurance) have the option of paying a yearly amount, quarterly or monthly. I used to elect to pay those bills quarterly or yearly. You can get a small discount if you pay in advance! I would then make sure I was saving regularly to be able to pay those larger bills when they became due.
Now I choose to pay everything by fortnightly or monthly direct debit if the option is available. I decided that the benefit to me of basically forgetting about those bills, once the intial direct debit is set up, is worth missing out on the small savings from paying upfront.
Two Types of Direct Debit:
- For bills that have the same charge from month to month. The annual bill is paid in full by dividing the whole amount by 12 months or 26 fortnights. Usually the service provider will work this out as they will often add an additional charge. This works well because the bill amount is consistent throughout the year.
- But I also set up direct debit payment for bills that vary from month to month because of usage. Our water bill is an example of this. I don’t know the exact charge for our water costs each month but I do know what I paid over the last 3 months or 6 months or even 12 months. I estimate a fortnightly amount to be direct debited, which will be slightly more than what I predict the bill will be. If costs increase (like recently), I simply increase that amount.
Bill Payment By Scheduled Transfers
A couple of bills I can’t set up direct debit payments for I simply pay off in advance. I am sure the specific company doesn’t mind! I schedule an on-going fortnightly transfer from our bank account to the account number for that provider.
When the bill becomes due, I already have a credit on the account that reduces the charges to nil. I currently do this for our phone and internet bill.
Automatic Bill Paying Tips
- Don’t make the change to automated bill payments all at once. Ease yourself in and set up regular automatic payments as each bill becomes due.
- Get your bills emailed to you instead of receiving them in the mail. Then all you need to do is check the bill amount and make sure that is correct. The automated bill payments have it covered. Sometimes I may need to transfer an additional amount for things like our electricity bill if it is a lot more than expected. But this rarely happens! If you are wondering (like I would) what rarely means, probably about twice a year.
- Do try and negotiate a better deal when annual bills become due or consider changing service providers. Here in Australia, I have found this can produce big savings especially with insurance providers.