Automate Your Payments For An Easier Life

Did you know that if you automate your payments you could be spending Sunday nights
at the cinema with the children rather than sitting at the kitchen table with
your calculator trying to balance your cheque book? Well, if you didn’t,
the following are three great (free!) ways in which to automate your payments
and make your life so much easier:

The Standing Order

All creditors now allow you to make a monthly standing order payment to repay
their debt. In fact, most creditors prefer this method as they’re fairly
sure they’ll get their money on time (although it is not a guaranteed form
of payment – standing orders, like cheques, can “bounce”).

The upsides of a standing order repayment scheme are: (i) you know the payment
will be made on time (thereby avoiding any late payment fees); (ii) the monthly
amount is fixed, so its easy to budget for; (iii) after a while you don’t
notice the money going out of your account, so when you’ve finished repaying
the debt, just transfer the standing order to your savings account.

Although payments via standing order doesn’t mean that you reduce the number
of creditors that you have, your bank should let you set up as many standing orders
as you want (provided you have the money to pay for them). Doing this will make
the day-to-day running of your account(s) so much easier.

The Direct Debit

The direct debit is the payment method of choice for creditors. As with the standing
order, the direct debit is an automated payment from your bank account. However,
unlike the standing order, a direct debit is not really for a fixed amount each
month (although, in most cases, practically speaking, the amount is fixed at the
same sum). Instead, a direct debt mandate (the authorisation you give to your
creditor to take money out of your account) says that the creditor can take as
much as they want. For this reason, you should be careful before giving a creditor
a direct debit mandate – make sure both of you (i) know the day the money
is going to come out of your account; and (ii) as much as possible, know the amount
to come out of your account.

Not really ideal for all payments, the direct debit is, however, really useful
for utilities bills. Just keep in mind that with the standing order you are the
one sending the money to your creditor, whereas with the direct debit your creditor
is asking your bank to pay them (so it’s a little like giving someone a blank
cheque!).

Online Banking

Becoming very popular is to open an account with a bank that lets you do all your
banking and bill payments via the internet. Internet banking is a great way to
stay ahead of your bill payments and finances without having to leave the comfort
of your home or office. Having said that, do make sure that you check to see if
your bank is going to charge you for processing transactions via the Internet
– as some do – before going ahead and doing it.

And finally…

As you can see, if you give some thought to automating your finances you could
find that you have lots of spare time to spend doing more enjoyable things –
like a night out with the family!

Your Money Or Your Life

Have you stopped to realize that although you go to school to learn about important subjects, no one teaches you how to manage your money?

Money is an essential part of life in our pursuit of happiness, yet very rarely will a parent sit down and tech their child how to handle their money.

This is true in grade school, high school and worst college. So what happens? Many of us end up in an extremely large amount of debt. We can’t seem to get it together even if we make more money.

I found myself in this trap about 13 years ago. I had an okay job, a car, and an apartment. Nice I thought soon I would buy a house and live the “American dream”. Wrong! I could never save enough to buy a house. I had plenty of credit cards, so many that I never had enough money due to many payments to put aside for my dream home.

What was happening to my paychecks? Well, I was over extended in credit card debt for one. The buy now pay later syndrome was well embedded in my head. That mentality had to stop! Since, I wasn’t terribly behind in my payments I was able to get some help from the creditors. I simply asked for a lower interest rate and/or the ability to skip a payment. After that call, I had to cut up and dispose of the cards. No! I didn’t cancel my cards but I got rid of them just the same.

Next I bought a tablet just for my budget information and bills. I also purchased a software program to keep track of my expenses. I think it is important to keep something manual that you can carry as well as a computer software tool.

Next, as bills came in, I wrote them down with the name, address, phone number of the creditor, my total balance, interest rate, and minimum payment due, the due date, and if there were any annual fees acquired with the card.

Review the card with the highest interest rate and pay more then the minimum due. Always ask if they can reduce your rate or seek the possibility of debt consolidation buy applying for a low interest rate loan or credit card. If you haven’t cut up your credit cards do not get a consolidation loan. Because most likely once your payments are manageable you’ll start using your cards again.

Minimizing your spending is the key to financial freedom. Make sure to start a savings plan after you’ve gotten your debt under control.