Making Use of "Scheduling" Payments
I'm In Debt
- Posted:
12/27/2007
I like to pay my bills online, whenever it's an option. I save on the cost of the stamp, (which is becoming a hefty savings- every time I do have to buy a stamp I cringe at the cost- come on, 41 cents to mail an envelope?) I don't have to wonder if the mail system will actually get the payment delivered to the right place on time (if you have a good mail carrier and post office you may not even be concerned about this, but if you do not have a highly reliable service- you will know exactly what I'm talking about), and best of all- online payments are typically processed faster than payments you send through the mail via check or money order.
Better than just paying your bills online though, are the companies that allow you to schedule your payments. I had avoided this previously because I always worry if I'm having a bad week or month income-wise; the payment will come out of the checking account when I don't have enough money to cover it and then BAM! A $30 overdraft fee. If you've ever bounced a check, you know exactly what happens after the first overdraft- another small withdrawal of some sort goes through before you have a chance to make the account right, and suddenly you've paid $60 in overdraft fees for $45 in payments. I call it the overdraft domino effect- and it's extremely detrimental to your financial well-being, so be sure you have enough money in your account to cover your automatic payments.
When you schedule payments, you can actually set-it and forget-it. I just set my three credit cards up on automatic, scheduled payments- where I got to even select the exact dates the payments clear the bank. In order to pay these credit cards off faster, I'm paying on them weekly. On Tuesday, I have $20 paid to credit card one; on Friday I pay two other cards $25 each. By paying small amounts weekly, I will actually pay them off in less than a quarter of the time it would take me if I sent that minimum payment once a month. While I probably wouldn't be able to come up with $80 to send all at once at the end of the month for card one, and $200 to send off to the other two accounts at the end of the month for cards two and three; dividing the payments into small, weekly amounts makes it easier to budget for and pay off.
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