Managing Automatic Bill Payments
Tips on keeping track of your finances online
Online banking features like automatic bill pay have made paying your bills quick and simple, but when you're paying multiple bills, it's important to maintain a system to help keep your finances both organized and up to date.
Bruce McClary, a certified financial specialist, warns, "You still have the obligation to make sure that everything is accurate, because nobody is checking for you." If you fall behind on any of your accounts, your credit can be damaged.
As more and more people make the switch to automatic online bill pay, it's crucial that they be diligent about monitoring their transactions and also aware of changing minimum payments and due dates. Make the following tips part of your regular monthly financial routine so you can better manage your finances:
- Check to see whether your financial institution offers free automatic bill payment. If the feature comes with fees, you want to be sure to account for that amount in your finances so you don't risk overdrawing your account.
- When paying bills with a credit card, pay off the balance in full. Using a credit card to pay off your bills can be a great way to improve your credit score and also accrue any rewards your credit card company might offer. However, it's important to pay off your credit card bill each month so you don't rack up a balance that will result in added interest. Always read the fine print before using your credit card to pay bills.
- Confirm the due dates for each bill every month. Always double-check the due dates and minimum payment amounts on your bills, and then confirm that the correct amount was actually paid out by your financial institution.
- Always back up your account statements. Whether you receive paper or electronic statements, be sure to save a copy each month so that if you encounter any issues down the road, you can refer to the relevant statement.
- Safety first! Take steps to protect your money and your identity. Make sure the bill pay site is secure, don't use easy-to-guess passwords, change your passwords frequently and always log out after you pay bills online.
While automatic bill pay can be a time-saving luxury, Erin Peterson of Yahoo! Finance lists some bills that should still be handled the old-fashioned way, such as:
Mobile phone bills: Especially for people with children who share a bill, the monthly statement may change from month to month. You want to be sure that you pay the correct amount.
Insurance bills: If you set these up for auto pay, you may forget to check into quotes from other companies every year or so.
Utility bills: When paying these bills yourself, you can keep tabs on your household energy costs and discover any areas you need to work on.
Finances are different for each individual, so it's important to stop and think about what's best for you. As Peterson says, "It's best to take each bill on a case-by-case basis and consider whether you will actually look the bill over every month if it's paid automatically."