Online banking and online bill pay is one of the greatest technological innovations for personal finance in the last few decades. Online bill pay makes it much easier than before to pay one’s bills and, in many cases, makes the whole process automatic.
Before online bill pay came along, paying bills meant addressing and stamping a lot of envelopes. It also meant writing out a lot of checks by hand.
That process took a lot of time, as you had to fill out envelopes, stamp them, fill out payment stubs, fill out checks, seal up the envelopes, get everything to the mailbox, and rebalance your checkbook.
It also had costs associated with it, since each envelope required a stamp and each check pushed you one check closer to reordering checks.
Now, when I pay my bills, I just do it in front of my computer. A lot of bills are paid automatically, with the amounts being billed to and directly withdrawn from our checking account. With the remaining bills, I type in the amount on the bill and hit submit. That’s it. It takes about thirty seconds.
The only setup time revolves around typing in the address and the account information for each bill once. After that, it’s about as easy as it can be.
So, how does this save you money?
For one, automatic bill pay ensures that you’re never late. If your bills are being paid automatically, you shouldn’t ever be late for a bill.
For another, the cost of stamps and checks almost disappears. You no longer have much of a need for these things, at least for paying your monthly bills.
For yet another, online bill pay helps you be sure not to overdraft due to bad math. Usually, it will tell you whether or not you have enough money to pay a particular bill before you hit the submit button.
If you’re not using online bill pay, make sure your bank has it and jump on board. There’s a bit of setup time, but once it’s in place, it does nothing but save you money and time.
This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere.