Bills, Bills, Bills | Pad Patter 8/1

I set up my recurring bills within my bank's "pay bills" feature. I do not set up automatic pay bill features because I review every statement for correct charges before I pay. But having the major accounts set up in one place, the bank, streamlines the process of bill paying and at a quick glance I can make sure I paid the monthly bills.

For most purchases I use a credit card. Each year I get between $200 - $400 cash back. And I pay off the card every month, so no recurring short term debt or increased cost due to % rates etc. I have a maximum spend goal for every month - and having almost all purchases on one card helps me "see" what I've spent for the month from recurring charges like Netflix/HBO to how much I spent on groceries.

In early adulthood I began saving money. Having those funds in the savings account has helped me pay cash for cars (or pay them off within the first 6 months). And when I had a home mortgage, I paid more every month. So, I definitely try to pay things off early. Being debt free is extremely liberating! I'd rather have a nice nest egg in the bank than lots of material things. I like to "pay me first" before I pay anyone else.

 

I've never used the bank feature to pay bills because when it first became available, none of the vendors I needed were electronic payments. The bank cut a check and mailed it to the vendor (I can do that myself). So for instance if a bill was due on the 10th, you needed to set it up to be paid no later than the 3rd which gave the bank the time to cut the check, put it in the mail and get delivered to the vendor. One time at work we received a bank check that was payable to the local electric company. We received it on the 10th which was the due date. I live near the office so I volunteered to drop it off on my way home from work. Otherwise the originator of the check would have been charged a late fee. But the electric company did offer the system of them pulling the money from an account. It isn't pulled until the 10th. For someone that may not have the funds in their account on the 3rd but would by the 10th, it made more sense to not use the bank.

 

Do you pay your bills electronically?

Yep, every single one of them. I don't trust the post office one bit, especially b/c the last time I used them for something important, a very large check I mailed was forged and attempted to be deposited. It created a huge mess for me and my mom to whom the check was going. I do let the internet bill auto-withdraw as it saves me $10/month on my bill but I otherwise do it all manually.

On time? Day of?

Always early. I don't trust my scatter brain to leave something so important until the end. We get paid bi-monthly so I assigned each of the bills to a paycheck and on the day we get paid, I pay the bill too.

Do you pay more to pay things off early?

Yup. Even if it's just rounding up to the nearest dollar or ten dollars etc. We paid both our cars off early this way and have continued making "car payments" to the savings account for years so we can pay cash for the next one. Hopefully that is! We now have a teenager with a driver's temps and soon there will be 3 cars and a much larger insurance bill to deal with!

Do you use a credit card to pay all the things, and then pay that at end of the month? (To accrue points or other benefits)

I use my credit card for every single thing possible unless it charges me a fee to do so... that defeats the purpose in my opinion. I don't wait until the end of the month though.... pretty much as soon as the charge clears I pay for it. It would probably be easier to just do it in lump sumps instead of having to reconcile my bank statement as often but I find it rewarding to pay it off before they charge any interest and because I know it'll get away from me before I realize it. It's been working really well for us for years so I guess that's what I'll stick to!