As if having to pay bills weren't painful enough, the clutter they cause--all those envelopes and inserts and sheets of paper--can make the process even more of a headache. Going digital with your bill paying won't solve the first part of that problem, but it can help keep bill-related clutter at bay. Here's a brief look at the ins and outs of electronic bill paying.
Many companies, from the phone company to credit card issuers to your local utility, now allow--and even encourage--you to pay your bills online or automatically. Depending on the company and how you handle your finances, you have a few options:
- You can receive notification by e-mail or postal mail when a bill is due, then go to the company's web site to pay it.
- You can set up automatic bill payments through your bank so that the amount of each of your regular bills is deducted from your account.
- You can set up automatic payments through your credit card so that other bills are charged to the card when they're due.
- You can sign up for a service (such as Paytrust or Checkfree) that will coordinate payments for all the bills you receive.
- You can pay your bills through financial software such as Quicken or Microsoft Money, which use a combination of the methods above.
The options you choose for electronic bill pay will depend on the bank you use, the bills you pay, and how comfortable you are with online transactions.
When you get a bill in the mail, chance are you get a lot more than the bill itself: you also get a payment envelope, a handful of inserts, and perhaps an advertisement or two, all of which can quickly become clutter. Opting to receive and pay your bills electronically can help eliminate these annoying little stacks of paper from your life. (As an aside, even if you do continue to receive bills in the mail, you can almost always toss everything but the bill itself into the recycling bin post haste.)
Many companies with online bill payment programs also offer the ability to retrieve old bills on their websites, so if you ever needed a copy of a past bill, you could easily find it without having to keep the paper version on file.
A note of caution
Though many online transactions are very secure--some moreso than transactions made over the phone--it's always worth taking some steps to protect yourself and your information. When you sign up for any electronic bill payment, make sure the company clarifies how they'll ask you for payment, what web site you'll use to make a payment, and what information you might be asked for to identify yourself when signing in to the payment site.
I strongly recommend going to a web site directly when making a payment or sharing any of your personal info (bank account numbers, SSN, etc.) rather than accessing the site through a link in an e-mail message. Also, make sure the user names and passwords you use on these sites are difficult for others to guess. And never give out important information in an e-mail message; most reputable companies will only ask for this info once you're safely logged in to their site.
Ready to give online bill pay a try? Start by making a list of all the bills you pay in an average six-month span--everything from the weekly and monthly bills (day care, credit cards, utilities, etc.) to those that are less frequent, like insurance premiums, seasonal expenses (snow removal, lawn care), and magazine subscriptions. Then do some research: how many companies to whom you pay bills offer online or automatic bill pay service? Does your bank allow you to pay bills online to other companies? Do you have so many bills that a consolidation service (like Checkfree) would be a worthwhile expense?
Once you decide on bill paying methods, take the time to sign up with the relevant web sites, keeping a list of the company, their web site address, the bill(s) you pay to them, how often you need to pay, and your user name and password for the site. Then set aside some time each month to go online and pay; if possible, consider consolidating your due dates (which many companies will allow you to do) so you only have to go through the payment process twice a month (say, the first and third weeks), rather than more frequently.
If online bill paying seems daunting, start small: pick one regular and relatively inexpensive bill (perhaps your garbage collection or utilities) and set up online payment for it. Once you get comfortable with the process (and start enjoying the lack of paper bills showing up in your mailbox), add another regular bill.
Before you know it, you'll be reveling in your clear desktop (no payment envelopes! no inserts! no ads!) and slimmed down files, and may even feel more in control of your finances than you have before.