I don’t pay bills

Photo courtesy of Cliff

 

…and you shouldn’t either. Here’s why:

Remember of course, the three aspects of a personal finance budget money sign-out sheet: Income, Bills, and Expenses. Putting aside Income for now, Bills are your monthly expenditures that are regular, single payments. They don’t need to be the same amount each month, but you still need to pay them regularly. Contrast this with your food expenses, which consist of many various payments throughout the month. You can’t schedule that.

I’m talking about Bills here. And I don’t pay a single one. Why not? Because I set up my bank to pay them for me.

Auto-pay style

If you haven’t already, I highly recommend setting up auto-pay for every single one of your bills. Here are some reasons:

You will never be late on your payments. Being late on a payment is not good. You’ll get charged fees, your mystical credit rating will take a hit, but most of all, your record will say that you did not do what you promised to do. Yes, you may be dealing with companies you dislike, but the obligation is still on you to be better than them. You “promised” to pay your bills by a certain date, so do so.

You will free up your brain. I’m a big fan of simplifying everything in my life when possible. And even though I advocate taking keeping a close watch on your finances, all the more reason to find things to not have to keep a close watch on. Setting up bills to be paid automatically is one less thing to have to think about. I just note that the bills were paid (to check for any inconsistencies or problems) and that’s it.

It’s easy to set up auto-pay for your bills. Most companies allow you to enroll on their website, though sometimes you have to call them up and give them your info over the phone. In any case, it’s really easy.

For those payees that don’t have that kind of infrastructure (such as your landlord), you can often set up an automatic bill payment through your bank. My credit union cuts a check and mails it to my landlord each month. On my end, it looks like just another transaction in my account. Just another bill paid.

The objection

I can’t setup auto-pay because I might not / won’t have enough money in my account!

Well as for the “might not,” it’s not like money is going to magically vanish out of your account, especially if you have a budget money sign-out sheet. With that, you will know one way or the other. And as for “won’t,” this is precisely when the practice of havingĀ float in your account becomes so important. You need to set up your account such that it has enough float to handle when your specific bills are due. (It might help you here to draw your money graph.)

With minor exception (such as when I’ve been in transition between certain payees), I haven’t paid a bill in years. It feels great. Try it yourself and see.

But enough about me. Do you set up everything on auto-pay? If not, why not?

Mike Pumphrey

Mike Pumphrey

I'm the founder and author of Unlikely Radical, a site to help people succeed with money, achieve their goals, and live intentionally.

I offer a free phone consultation to anyone who is interested in changing their financial narrative. Are you ready? Click here for details.
Mike Pumphrey
Posted on September 16, 2013