I was always scared to automate my payments. I think my fear stemmed from the time in my life when I had no money to pay bills. I struggled to make my payments on time due to lack of funds to pay them. Even now, with my budget on track, I still get nervous about having automated payments – I am afraid I will overdraft or something worse.
However, automating your payments is an amazing budgeting tool. It allows you to avoid paying late fees and possibly more interest. It also gives you more freedom in terms of not worrying over if you have already paid that bill or getting the payment in the mail on time.
How do you automate your payments? You can do this a couple of different ways; you can set up the automatic payments through each individual company (most companies offer this as a free service) or you can set it up with your bank (this works great for those companies that do not offer automated payments).
If you are like me and worried about over-drafting your account, let that fear go by knowing that you have a handle on your money through your budget. If you keep track of when your bills are due, you can make sure you have enough money in your checking account before the automated payment hits.
If you are still nervous about automating your payments, take it one payment at a time. For me, it started with our insurance and Netflix payments. Once I realized how amazing it was to not worrying if those bills were paid each month, I knew I had to automate more.
Having automated payments has helped me to remember to pay those dreaded student loan payments and to make sure that I paid the water bill. The key to maximizing the effectiveness of automated payments is to make sure that you are organized. Even though with automated payments you do not have to worry about losing a bill because it will be paid regardless, you still need to keep track of your bill statements, due dates, and the amounts paid.
I prefer to have a binder system to keep track of all our budgeting documents, but you could easily set up a file folder on your personal computer to save digital copies of everything. Whatever system you use, keep it organized and automate as many payments as possible.
Do you have all your payments automated or do you have a fear of automating your payments?
Check back tomorrow for another post in our 31 Days of Real Life on a Budget series!
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