In my quest to simplify my life I’ve identified the areas of my life that are my pain points.  Bill paying is one of those pain points.  Keeping track of paper bills, finding time to sit down and pay bills, having stamps on hand, running out of checks, forgetting to pay a bill and getting a naughty notice – all those things cause a lot of stress in my life.

Fortunately we have now entered the electronic age and bill paying has become SO much easier!  My method has changed over time but has evolved to where it’s rare for me to have to manually pay a bill.  A side benefit is that by paying bills the way we do we have easily created a budget and are more focused on where we are spending money.

If you are wanting to move to electronic banking here are some suggestions.

1.  Not all banks are created equal

We bank at a few different banks for various reasons.  Our legacy bank is a small, local bank that hasn’t had the bells and whistles like mobile banking or bill pay.  To make things simpler for me, I opened an account at a large bank that had all the bells and whistles as well as a location conveniently located to my employer.  Quite ironically, our smaller bank now has the same program as our larger bank only their charts and graphs work better.  Guess where I’m moving all our bill paying to.  When looking for a bank (or a credit union) be sure and make sure you understand the fee structure and the bill paying options.

2.  Set up a separate account for bill paying

This has probably been one of the best things we have done.  Back in the day it seems like I was always “forgetting” a payment that I had sent and would find myself overdrawn and scrambling to get money in the account.  We have one account that nothing comes out of except bills.  I calculate exactly how much is needed per paycheck to cover our bills (plus a little extra for any additional bills that may pop up) and that’s the amount that goes into that account.  We have a separate account that we use for gas, groceries and incidentals.

3.  Set up as much as you can on auto pilot

Any bill that has a fairly stable payment I put on auto pilot.  Even a few bills that may have some changes to the amount due get added to auto pay.  I figure if I overpay (I assume a few dollars higher) by a few dollars I can “true-up” at the end of the year and potentially have a December where my bills are smaller.  Doesn’t that sound like a nice Christmas present to myself?  A few bills that I put on a recurring payment are:

• Church donations (instead of putting our donation into the collection plate I send them a check every paycheck)
• School lunch payments
• Insurance (car/house)
• Cleaning services
• Water bill
• Mortgage
• Cable

At any time I have the flexibility to go in and cancel or modify a payment that has been set up as recurring.

4.  Review monthly

At least once a month I log into our account and verify everything is chugging along as expected.  I also like to check the pretty graph that they kick out for me.  The graph shows where our money is going to (at least from this account) and provides a good visual as to areas that we could focus on if we were looking to cut expenses.  I also use this review time to pay any additional bills that may crop up.  I have added our doctor as a bill paying option but don’t have a recurring payment.  When I receive a bill all I need to do is type in a payment amount and pay date.  Much easier than writing a check, addressing the envelope and getting it in the mail!

What system works for you?