Sunday, January 6, 2008

Ten Things You Can Do to Save Money this Year: Nine

9. Pay your bills online. If your bank doesn't offer free online bill pay, you can generally set it up directly through the company to whom you owe money (such as your phone or cable company).

The savings will vary, but include the cost of checks and the cost of stamps (roughly $25/year if you pay five bills per month through the mail). (Can you think of anything you'd rather do with $25 than buy stamps?)

Additional savings include late fees associated with lost checks, lost or misplaced bills, and late payments.

Automatic online bill pay features can also be advantageous if you are trying to pay down debts, such as credit cards, mortgages, or car loans. If you set a certain amount (above what's due) to go every month, it will definitely happen--and on time--versus the old-fashioned check-writing method, which is more fallible. Some months you may feel you can't afford the extra cash toward a credit card or mortgage if you are the one taking the time to physically write the check, but, if your checking account just does it automatically, you only have to make the decision once.
The one caveat here: if you are a person without a regular income, without direct deposit, with a shared checking account and a flawed system for managing it, etc., don't set up auto bill pay features. Remember, in order for auto bill pay to be beneficial, you have to have the money in your account. If an auto bill pay feature causes overdraft fees, you'll only be causing yourself additional stress, strain, and expense, so skip the tempting convenience and keep writing checks or using manual online bill pay.

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