We only have so much mental capacity. When your attention goes towards tending to one thing, it’s at the expensive of other things. For example, if you constantly worry about when your bills are due, then you use up mental space that could be going towards creative thinking, project planning, family goals, or simply daydreaming.
Yes, of course, you do have to tend to certain things in your own financial life. However, you can also automate a lot of your financial life. For example, you can set all of your bills to autopay so that you don’t ever have to worry about them again. That takes that monthly hassle off of your mind and gives you the chance to use that brain space for something better.
Why Automate Bills Payment?
When you put your bills payment on autopilot, you save yourself a lot of trouble. For me, the benefit is mostly in relieving myself of the stress of having it on my To Do list. I like to keep that list as short as possible, allowing my brain maximum attention for other, more interesting, things. However, that’s not the only reason to automate bill pay.
One huge reason, of course, is that you won’t ever have late payments again. If you set up autopay then you can rest assured that unless there is some huge glitch in the system, your bills will all get paid on time. I’ve had my bills payment on autopilot for years and have never had such a glitch occur. Many people worry about this and the fear causes them to hesitate to automate their finances, but I’ve found that there are rarely problems with automatic bill pay. Furthermore, in the instances where problems do occur, they are usually easily fixed.
How to Put Bills Payment on Autopilot
If you’re ready to put your bills on autopilot, then all that you need is a little bit of time and your account numbers.
First, list out all of your monthly bills. These may include:
- Rent or mortgage
- Insurance payments
- Utilities, phone, and cable
- Credit card payments
- Payments to other loans
- Miscellaneous subscriptions
Set Up a Rewards Credit Card to Autopay Some Bills
Determine how you want to autopay each bill. Generally speaking, you can put utilities and subscriptions on a credit card. However, you have to pay your credit card with your checking account. I recommend paying all bills that you can on a rewards credit card to maximize the benefits of your payments. Then set that credit card to autopay with your checking account.
For example, let’s say that you have Hulu and Netflix subscriptions. Those are probably already set to autopay to whatever payment method you used to set them up. Go in to your account settings and make sure that you are using a rewards credit card for those accounts. You can also go in to your other online accounts and see if they accept credit card auto-payment. For example, I’m able to pay my AT&T phone and Internet bill using autopay with a credit card. However, my electric company doesn’t accept autopay with credit cards so for that one I can only pay with my checking account information.
Note that you can generally enter autopay information into the “payment settings” section of most online accounts. Each site is different, of course. The tab were you set up payments for Hulu looks different from the tab for setting up automatic payments for your credit card. Nevertheless, it’s all fairly straightforward on most sites. Look for the terms “payment” or “autopay” (such as “manage autopay”). You can search in a site’s “help” function if you have trouble locating the section.
Choose Your Terms for Autopay on Credit Cards
After updating all of your accounts that you can autopay with a rewards credit card, it is time to make sure to put all of your other bills payment on autopilot as well. This starts with your credit cards. Since you are going to have all of your other bills paid by autopay on your rewards card, you want to set it up so that you also pay that off each month using your checking account.
Go into the payment section of your credit card online portal. Follow the steps to set up autopay. You can typically choose from the following three options:
- Pay the monthly minimum.
- Pay the entire balance.
- Choose another amount.
If you definitely have enough money in your checking account to pay the balance each month, then this is the top choice. Alternatively, you can sometimes set a cap. For example, “pay the entire balance unless it exceeds $500.” Often, you can set up alerts so you’ll receive a message when the payment is about to be made. Therefore, you can check your account to make sure you have the funds.
If money is tight, you can always set autopay to the monthly minimum. At least this will guarantee that you don’t accrue late payment charges. Of course, you’ll have to use some of your brain space to go in and pay what you can when you can. Nevertheless, automating the minimum payment will make it so that it doesn’t have to constantly be on your mind.
Automate Your Savings
In addition to paying your bills each month, you should also pay yourself. It’s easier to set aside savings if you automate this as well. I have set my checking account up to automatically send $250 over to my savings account every two weeks. In the past, I’ve also linked my checking account with a high-interest online-only savings account and did automatic monthly payments to that savings account.
- First, make sure to automate all of your monthly bills.
- Second, it’s time to automate your credit card payments.
- Then, automate your savings.
Of course, you can also use additional tools to track your bills, savings goals, and investments. For example, you might use Mint to track your money and also Trim Financial to lower your bills. This is a great tool for people who have put bills payment on autopilot. It will alert you if anything doesn’t look right with your money. It will save the information for you for the times when you want to go back and check on all of your finances. And it will work quietly in the background of your financial life during the times when you are more interested in giving your attention to something other than your money.
It takes a few minutes to set up autopay on each of your accounts. If one of your cards expires, or if you change your checking account for any reason, then you’ll have to go back in and update those settings. Overall, however, it’s a minimal time investment that saves you a lot of time and mental energy in the long run.