Comments on: Budgeting In The Era Of Online Bill Pay

By: Gert

Gert — Tue, 19 Jun 2007 17:12:22 +0000

Another handy trick is having you’re direct deposit sent to savings and then having a automatic transfer to checking. I find this keeps me on track for savings and I have the added bonus of using my overtime pay for large items I want and would oterwise not be able to afford.

By: PF

PF — Sun, 17 Jun 2007 20:07:11 +0000

We have an idiotic gas company here and one month they billed us for $1400 because one of their employees read the meter wrong. I will never let them near my checking account or even my credit card; they are so dumb. The other utilities, I have set up on a rewards credit card and it really works out very nicely.

By: plonkee

plonkee — Sun, 17 Jun 2007 15:39:55 +0000

After a few late payments on my credit card I now have everything set up to be paid automatically. I couldn’t do it any other way anymore.

By: Mardee

Mardee — Sun, 17 Jun 2007 14:39:27 +0000

Steve, many companies will let you pick the date of the automatic withdrawal (and almost all credit card companies give you that option). My bills are not scheduled to be paid until the due date – however, I then have the luxury of scheduling everything at one time, rather than piecemeal.

By the way, if your utility company doesn’t have automatic withdrawals yet, contact them. My water company was the last to fold but finally did after I contacted them on numerous occasions. Now they send me a notice about one week before the bill will be deducted from my account.

I also use Electric Orange in combination with a credit union as my linked account. I can still use the credit union account when I need a quick check (which I only use for the boy who cuts my grass, since I’m never sure when he’s coming) but am gravitating more and more towards my ING accounts.

By: Prasanth

Prasanth — Sun, 17 Jun 2007 02:43:50 +0000

I also use ING EO for paying bills online except for my rent which i pay using a check as the property management company does not accept online payments.

By: gabe

gabe — Sun, 17 Jun 2007 00:54:33 +0000

For my “variable” bills, I made them static. My natural-gas company has a “budget” program and my utilities company allows me to do this myself. Basically I pay the same amount a month between Jun and Oct (they/I review the current usage, recalc an average), then pay the same Nov to Mar (another review) same amount Mar through May. At which point the balance (mine or theirs is due). I just started this and will prob actually pay the balance (if it is mine) at the Nov/Mar/Jun times. Doing this allows me to set the payment to be automatic. As for the cell bill (the only other one that could be variable though never has been), I have it auto paid from my checking account (I don’t allow anyone else to take money out automatically). And then I check my bill and make sure it is the full amount. Works for me. Yes I know I could earn interest on that money but this requires less discipline and less scrambling (money-wise) during the winter.

By: MVP

MVP — Sat, 16 Jun 2007 19:15:57 +0000

I love the convenience of paying online through our credit union, and I’m often shocked when I hear friends say they still don’t trust that method (they fear computer-based theft and fraud). For me, the benefits outweigh the risks, and frankly, I’ve experienced more problems paying by check than online. Also, we use the free PearBudget system, which is available for download online, to do our budget. We used to do it on paper, but then switched, so now everything’s in one simple place: the computer. Also, even though we pay online, we still scrutinize our bills – there’s no reason you can’t. I guess the difference between that and autopay is we’re telling our credit union how much to send to whatever company; we’re not authorizing that company to just take whatever amount out of our account. However, we’ve paid a few bills, like Netflix, on autopay for years. It’s the same cost every month, and we’ve never had a problem with them taking more than they’re due. But yes, there are some companies, like the phone company (Verizon, the crooked jerks!) that I wouldn’t trust putting on autopay.

By: Steve

Steve — Sat, 16 Jun 2007 16:50:49 +0000

I do not do automatic payments because I want to control when the money comes out of my HSBC savings account. I figured that between the due date and the delinquent date, I can earn some interest. So I let my money sit until it is time to pay the bills, and then I move the money from the savings to the checking and then go to the utility company website to pay my bill. If it takes a couple of days to hit my account, a few more cents in interest. I am so strict on paying my bills when my reminder pops up because I know that any slip would spell disaster. May be I live my life like I am playing Chess. Squeezing out every advantage I possibly can.

By: a_m_m_b

a_m_m_b — Sat, 16 Jun 2007 16:40:45 +0000

One caveat to “set & forget” with Bill Pay, double check your statements quarterly to make certain the payees have not changed their payment addresses. Working the Web Bill Pay support queue at my employer I see alot of members failing to do that & getting “nasty grams” &/or penalties from their payees regarding missing payments.

By: Angie Hartford

Angie Hartford — Sat, 16 Jun 2007 16:34:00 +0000

Autopay tends to work better for folks with a regular income. Those of us who are self-employed are never in that “rut” of knowing how much we’re getting, or when we’re getting it.

That aside, I do enjoy paying bills online. But I sit down to do it, as Autopay would quickly create more problems than it would solve.

By: martha in mobile

martha in mobile — Sat, 16 Jun 2007 12:05:33 +0000

I, too, rarely write checks. I use online bill pay from my bank for all my cyclically recurring payments. I let the amount from the previous bill carryforward — I adjust the amount when the new bill comes. This way, semi-annual payments like car insurance and life insurance show up a month in advance for consideration, and I can compare the previous charge to the amount on the current bill. All my “in person” and online purchases go on a rebate credit card. The annual rebate adds up to $300 to $500/year, which becomes family vacation money. Of course, this only works because I pay the credit card off each month. Thanks for sharing, Trent and commenters — it’s great to get ideas to fine tune my system!

By: Ryan

Ryan — Sat, 16 Jun 2007 11:02:24 +0000

Financial talk for the rest of us? And you use the word transmogrify? Hehehe. Anywho dude… love your blog, found you via the msn early retirement story. Ill be coming back, im from Australia.

By: Ed

Ed — Sat, 16 Jun 2007 07:17:41 +0000

I love ING Electric Orange. Most notably for the 4% interest rate.
I was and still am, very pro credit union. I alway told my friends and co-workers about credit unions, no minimum balances, interest paid on checking (a measly 1.25%), lower loan rates, etc.
But I am really excited about this EO account and plan on using that as the bulk of my bill paying. That is what I am going to to be preaching now.

By: Paul

Paul — Sat, 16 Jun 2007 01:51:56 +0000

Having auto-pay set up can actually save you money. Last month I did not receive my Capital One statement in the mail. If I did not have my payment set up to automatically make a payment I could have been hit with a late charge, $39 in this case.

E-payment also saves you postage. I typically make 8-10 payments per month. Over a year this really adds up.

By: Jon Payne

Jon Payne — Sat, 16 Jun 2007 01:02:25 +0000

Why use Excel rather than something like MS Money or Quicken for your budget and account tracking? I use MS Money and love it. I just import all my transactions from my online banking center and then “approve” them to let MS Money know they are legit, and assign them categories. My wife and I use our check card for most purchases, this way we can track exactly what we spend on gas vs. groceries vs. clothing, etc. Very easy. I used to use Excel but unless you have a really pimped-out spreadsheet with tons of charts its much easier and more features with one of these personal finance software packages.

By: Larry

Larry — Sat, 16 Jun 2007 00:18:13 +0000

Great suggestions. I autopay everything as well. For variable expenses, I use my banks online bill pay, and wherever possible on my utility bills I use the fixed amount payments so I have the same payment year round.

I haven’t written checks in a long time either and it’s just one less thing I have to worry about.

No using credit cards (i.e. reward cards) for me, everything comes out of my checking account. I don’t do credit cards.

By: Bill

Bill — Sat, 16 Jun 2007 00:06:32 +0000

I don’t do autopayment since my utilities became available online (they send me an email, and most still send paper bills as well)

I also round up variable, but ongoing bills like utilities to the next dollar, or ten dollar figure.

E.g. I electronically pay $100 on a utility bill of $98.67.

I’ve found that much easier to reconcile if you still use paper records such as a check register.

By: Checkbook Confessional

Checkbook Confessional — Fri, 15 Jun 2007 23:30:17 +0000

A few months ago, I set up all of my bills (credit cards, telephone, car and renter’s insurance) to literally pay themselves through Bank of America’s eBill system. Like you, I haven’t touched my “analog” checkbook in months, and there is something quite liberating about having everything automated. I’m looking forward to adding automatic savings transfers into the mix. I no longer worry about missing bill payments!

By: Jim Lippard

Jim Lippard — Fri, 15 Jun 2007 22:34:14 +0000

Phoenix–I share your dislike for giving out debit authority on my checking account, but I’ve done it for my utility company in return for a 1% discount. I’d use a rewards card, but they charge a $5.95 fee to charge a credit card, so the 1% discount is a better deal. I use a rewards card for everything else that accepts credit cards without penalty, and my bank’s free bill pay service for other bills. My most common use of physical check-writing is for cash gifts to individuals (e.g., birthday and wedding gifts).

By: !wanda

!wanda — Fri, 15 Jun 2007 22:20:07 +0000

Auto-pay for variably changing bills is sort of dangerous, if it means you don’t scrutinize your bills.

I wish I could pay my rent online. My landlord, though, is an old, old man who literally doesn’t know what an email address is. (He asked me if it was like a fax. I told him, “Nevermind.”)