How much time do you spend picking up your payroll check, standing in line at the bank, figuring out how much cash you’ll need right now, how much to leave for bills, paying them, and reconciling accounts? Oh, you ran out of stamps? Add a trip to the post office.
I haven’t paid a bill for, hmm… nearly 20 years. Well, not a regularly occurring bill anyway. And the dreaded chore of manually reconciling my accounts? Uh-uh – no more of that either. And my credit score just keeps going up. Why?
Automatic Payroll Direct Deposits
Most large employers offer Direct Deposit where your pay is deposited to your account electronically, eliminating trips to the bank or misplacing the check. Your funds are available on the day you get paid, and there’s no waiting for them to clear. It can also be set up to split the amount to several accounts (e.g., checking, Holiday, etc.). And, if you’re away on payday, your funds are accessible through ATM machines.
If your employer does not provide this service, most banks do and are willing to work with your employer to set it up, even for smaller businesses – check with your bank for guidelines. There are also many payroll services available to employers who handle the entire process.
Re-Scheduling Due Dates for Bills
Whether you’re paid weekly or otherwise, bills are almost always monthly, so it makes sense to set up a monthly budget. When you think in monthly terms, you’re more apt to ensure your bills are paid when they’re due.
A process that worked well for me was to ask all my companies to change my payment due date to the 5th of each month. After depositing my paycheck, I take out only enough for groceries, gas, personal items, etc. All the bills are paid at the same time making it easy to know what’s left for the rest of the month. It takes adjusting initially, but there are many benefits.
Online Bill Payer
Most banks offer an online bill payer service where you set up regularly scheduled bills to be paid on demand or continuously each month. This service has freed me from manual bill paying for more than twenty years. I use it only for bills having a set amount (e.g., mortgages, loans, newspapers, memberships, regular donations). If you’re on a tight budget with credit card payments, it’s beneficial to use this service and set the payment slightly higher than your highest minimum payment. If you are able to pay a higher amount, you can adjust it before the payment date.
Other Automatic Payment Services
Some bill amounts fluctuate each month (e.g., electric, telephone, cable telephone, and insurance). For those, it’s easier and more accurate to allow the company to deduct the amount due directly from the account, and it’s always paid on time. This type of service is best for credit card payments where the balance is paid off each month. I’ve even allowed a building supply company to deduct my monthly charges to take advantage of their early payment discount. The savings adds up.
When initially using either payment service, verify payments were timely and accurate. Always review statements to ensure there are no charges in dispute. Some people may be hesitant having a company deduct funds from their account, but in twenty years, I have not seen any errors related to the service.
If you’re still not convinced, here are some of the other benefits of getting your bills automated and online:
Your Credit Score
One of the largest benefits of setting up automatic payment services (especially if set it up continuously) is that it usually increases your credit score since payments are consistent and timely.
Reconciling the Checkbook
There are many computer software applications allowing you to quickly and easily reconcile your accounts. It takes a little time to set it up, but once it is, the time to reconcile is cut down to about 25% or less. And all your records are ready for that other dreaded chore – tax preparation!
Another benefit to online banking is the elimination of paper statements and bills from the waste stream, helping to protect the environment. Statements and checks can be viewed online or saved to your computer.
I save at least 10 hours each month using direct deposit, online payment services, and computer software for account reconciliation. If you aren’t already doing this, isn’t it timeto break the cycle?
Mary Anne “Mimi” Corwin is a professional organizer and productivity specialist with a B.A. in Business Management from New York Institute of Technology. She has organized many private events, reunions, public conferences and banquets, training workshops, and fundraising auctions. She specializes in document and digital data management, database development, and designing processes to keep tasks on track. She and her husband Todd live in Flanders and have two children, Brianne and Kiersten. Mimi can be reached at AProAtOrganizing.com.