Technology can be a burden at times, but it also can be a blessing. Put technology to work for you and take a few items off your monthly “to do” list with the convenience of autopay, or scheduled/recurring transfers. Avoid missed due dates and late fees—and the resulting ding to your credit score—plus help save for your future, all from the comfort of your computer or mobile device.
Here are 6 payments you should put on automatic:
1. Utility Bills
To ensure uninterrupted service, and avoid late fees, electricity, natural gas, water, sewer, internet and other utility bills can often be put on autopay. Rather than having to remember to login to various accounts like BGE, Comcast, Verizon etc. you can set up autopay so your bills are paid automatically each month.
Savers Tip! Set up automatic payments of your utility bills to a credit card that offers cash back and rewards. Earn cash back or other rewards just for paying bills that you have to pay anyway. [Be advised—some utility companies charge you a processing or convenience fee to pay your bill with a credit card, so you should ensure the credit card rewards you can earn will offset the fees you pay.] Be sure to pay off the credit card each month to avoid interest charges.
2. Credit Card Bills
Similar to your utility bills, you can set up autopay of your credit card bill. That way, you don’t have to worry about missing payment due dates or incurring late fees. You can choose to pay the entire balance each month, a certain set amount, or just the minimum payment required. You can always also make extra payments to your card throughout the month as you add new charges to it.
3. Car and Homeowners Insurance
Car and homeowners insurance is something you don’t want to be remiss at paying, since a lapse in coverage can be costly to remedy. Set up autopay for your auto and homeowners insurance so you don’t have to worry about missing a payment or a break in coverage, even if you’re ill or away on vacation. And be sure to check with your insurance company—some offer a discount for autopay.
4. Retirement Contributions
With so many immediate bills staring you in the face, putting money in your savings may end up on the back burner. But your future self will thank you when you make saving for retirement a priority, and autopay can help you do this automatically.
If you don’t have the option for an automatic payroll contribution to a 401(k) through your employer, consider getting an Individual Retirement Account (IRA) and setting up automatic transfers from your checking account to your IRA every pay day. With compounded interest, over time even a little bit added on a regular basis can really add up. You won’t notice the money is gone, and you’ll be building wealth for your future without having to think about it.
5. Mortgage or Rent
Some mortgage lenders will allow you to set up autopay.
Autopay might also work with rent payments. Some landlords and rental management companies charge 3%-5% of your monthly rent if your rent payment is late. That can seriously eat into your budget!
Check with your landlord to see if they accept credit card payments and allow you to set up autopay. If that’s not an option, you can set up automatic Bill Payments direct from your checking or savings account. That way, you can have peace of mind that your payment is on time each month.
6. Charitable Contributions
If giving to your favorite charity, church or other non-profit is important to you, consider setting up autopay for your donations. You can set up autopay on your credit card (and earn rewards!) or set up automatic payments from your checking or savings account. You can rest easy knowing you’re helping causes you believe in on a regular basis, without adding something else that you have to remember to do. Be sure to keep a record of your donations for tax-purposes.
Don’t put vigilance on autopay
While putting recurring payments on autopay can help relieve some stress over bill paying, it’s important to stay on top of your accounts and check them regularly for any signs of fraud or unusual charges you don’t recognize.
Plus, since mistakes do happen, you’ll want to check your autopay amounts to make sure they are correct. And, if you cancel a service or subscription, or decide to stop making donations to a certain charity, check to make sure the autopay is no longer being taken from your account.
Lastly, be sure you plan ahead so that you have enough money in your budget and account to cover your payments. One method is to jot down monthly autopay bills onto a desk calendar, as a visual reminder to make sure there are enough funds in your account to cover them as they come due. It’s also a good idea to leave a buffer in your main account to avoid overdraft fees or returned payments.
Resources: MoneyTalksNews, National Association of Mortgage Brokers, Personal Finance Education