Posted on October 2, 2008 at 6:33 am One of the great things about internet banking, other than its convenience, is the facility to set up automatic weekly transfers which are under your own control.  Unlike giving the bank a direct debit authority, if you have an emergency and need to stop the transfer temporarily, you can do so from your own computer without incurring bank fees. I use these transfers to pay my electricity, telephone, subscription TV, internet, credit card, personal loan and other bills weekly.  I started by adding up what each bill cost me per year, divided it by 52, and set that amount up on my internet banking site.  There are two advantages to this: 1.   The temptation to spend the bill money on entertainment or impulse purchases is severely curtailed, as what is left in your account is your grocery, fuel and spending money.  This is a bit of a shock at first, as it forces you to examine your spending patterns, but you soon get used to it.  If you haven't got it, you can't spend it. 2.   I now often get a bill for electricity, telephone etc. and find I am a few dollars in credit!  Believe me, it feels great to get a bill, find that they owe YOU money, and file it away, knowing you've got it covered.

Posted on October 2, 2008 at 8:07 am This is great advice. However, I don't think Americans, in particular, have been programmed to think weekly. Our gig is monthly. Every sales pitch comes to us saying easy monthly payments. Since we bought that idea, how do we change it? As a point of note, mortgage bi-weekly payments is least successful in the U.S. Australia, your home, loves the bi-weekly system. At least that is what I understand.  

Posted on October 2, 2008 at 8:07 pm You are quite right.  We still take out mortgages, for example, that require a monthly payment, but our lending institutions allow us to make these payments weekly, fortnightly or monthly, as long as we are meeting our obligations.  So if our monthly mortgage payment is $2500, we would simply divide that by 2 and pay $1250 each fortnight. The benefit of paying fortnightly is that every year we are making an extra payment, as there are 26 fortnights in a year, not 24.   So we are getting ahead all the time, which eventually reduces the total amount of interest we pay, and also shortens the term of the loan. As far as changing your programming, I guess it's a mind-set.  We still get the same advertsing blurbs, but because most Australians get paid weekly or fortnightly, we tend to automatically divide everything by the frequency of our salary.  And for Americans, you could still set up your transfers monthly, so that your bill payments come out of your salary before you get to the ATM.  You are still left with only your spending money.  I think that's the key - put your bill money somewhere where you can't touch it (preferably with your creditors because you know they won't give it back, even if you beg and plead)!  Then you can work on sticking to your budget, and being a bit disciplined.  Hope that helps.