One of my personal goals for this year was to get my finances on automatic so that I wouldn’t have to spend a lot of time each month paying my bills. I divided my bills up into three categories:
1. Variable payments – things like gas bill, electric bill, phone bill. The amount of these bills fluctuates each month.
2. Fixed payments – things like tithe, car note, mortgage, cable bill, and charitable giving. The amounts of these bills do not fluctuate from month-to-month.
3. Retirement contributions and savings accounts – this is a no-brainer but I listed them because they are on automatic.
As a general rule, I don’t like giving an entity the right to take something out of my bank account. I made exceptions for my variable payments and set each one up so that it is automatically drafted from our account each month. For the fixed payments, I set up our bank account so that these bills are paid automatically each month, including our tithe.
I gotta tell you, this year has been NICE! Our tithe is current and none of our bills have been late due to my forgetfulness. I HATE paying late fees on something that I “thought” I already paid (we’ve all been there haven’t we?). Now I don’t have to worry about that.
Now, before you run out and do something like this, let me warn you:
Make sure you have a cushion in your bank account to do something like this.
Why? Because some banks may change the date that they withdraw funds if the original withdrawal date falls on a holiday or weekend. I don’t think they would withdraw money before the original date, but you never know. Be sure to read the agreement to find out what the procedure is. Also, you need a cushion just in case one bill turns out to be more than you expected it to be (I’m thinking about the phone bill or electric bill). So, it might be wise to have an extra $500 – $1,000 in your checking account for unexpected expenses.
One last thing: for those accounts that you have given permission to debit your bank account each month, remember that they usually require notice in advance if you decide to quit the program.
So, if you are thinking about goal-setting for 2007 and simplifying your finances is one of them, then I urge you to put your finances on automatic and then cruise through 2007.