7 Clear Advantages of Electronic Bill Payments
We all have to pay bills. It is impossible to exist in today's world without paying at least one bill per month. If you have figured out a way to not have monthly bills, that is amazing. You have to let me know how you managed to do that if you have. For the rest of us that have bills to pay each month, we need to make it as simple as possible.
I remember the days of getting paper bills in the mail, writing checks and mailing them back out. Twice a month, I would sit down with a stack of bills and pay the ones that were due or going to be due in the next two weeks. I would have to write checks and put the check in an envelope and send it on its way. It was a tedious task.
So many things have changed since then and now I pay my bills online and it is amazing. This is just one of the many advantages of electronic bill payments. Continue reading to find out all the reasons why you should switch over to electronic bill pay.
What Is Electronic Bill Pay?
Electronic, or online, bill pay has been around for quite some time. It really is not a new feature that banks offer. Over the years, banks have offered it in varying ways. Many banks were limited in their offerings. Other banks charged you to use electronic bill payment. Much has changed since those days. Today it is offered by most banks and credit unions to help you organize your bills and pay them on time. Avoiding late fees is one of the major advantages of electronic bill payments.
Pay Your Bills on Time and All at Once
While you have been able to pay your bills online through the retailer for a while, you had to remember to go to each individual bill to pay it. For example, to pay your credit card, you had to go to American Express, or Discover, or whichever banks gave you a credit card. You would have to go to a different website to pay for your internet, your mortgage, and your car. Another one of the advantages of electronic bill payments is that you can go through one website, your bank's, to pay all of your bills. Most banks promise that your bills will be paid on time. If they are not, they reimburse you for any late fees you incur.
How Do I Get My Bills Paid Electronically?
For the most part, electronic bill pay is fairly simple. First, you have to make sure that your bank has electronic bill payment. If you are looking for a new bank, you should make sure that your selection offers bill payment electronically.
After you have done that, you should go onto their website and find the page for online bill pay. They should have some type of bill management service on their website, but first, you have to set it up.
- Gather All of Your Bills
This will be the last time, I promise. Well, until you switch banks or acquire new bills. For now, gather up all of the bills you have. You may have to enter the information of the company to whom you owe money. The information may not be in your bank's system. You should only have to enter the information one time. After that, it should be stored on the bank's website. - Collect Information For Each Individual Bill
When you gather all of your bills, make sure you get the account numbers and addresses for the individual bills. - Set Up Payment Times
You then select when the payment should be sent. You can also select if it is a one time bill, or if the payment should be recurring. You are also able to set a reminder so you know when the bill is due. There are so many advantages of electronic bill payments. You should consider looking into if your bank offers electronic bill payment. But, not yet. First, you should continue reading this article that explains all the advantages of electronic bill payments.
Advantage #1 - Convenience
One of the advantages of electronic bill payments is that it makes your life a little more convenient. That is something we all could use a little more of today. Electronic bill pay adds convenience to your life in many ways. It gives you a central location from which to pay all of your bills. Gone are the days where you have to log on to many different websites with different logins and passwords.
You Can Schedule When Bills Are Paid
Another added convenience of electronic bill payment is that you can schedule when payments are made. The payment can be made on the bill's due date, or another date that works for you. Just be sure that you are not selecting a date after the bill is due. You may get late charges for late payments. Scheduling your bills to be paid takes the worry from you about remembering to pay the bill.
Ensure That There’s Enough Money in Your Account
One thing to keep in mind is if you set up the bill to be paid automatically, make sure you have money in your account to cover the bills you want to pay. If you do not have the money in your account, you could incur fees from your bank, as well as late fees from the biller. That is something you don’t want to happen. This is why you should always save some money.
Once you schedule the bill to be paid, your bank pays the bill electronically or issues a paper check. You should verify which way your bank pays the bill. If your bank issues a paper check, it may take longer for the biller to receive your payment. You want to account for that when deciding on a payment date. If your bank pays electronically, the payment should post right away.
Advantage #2 - Security
Another one of the advantages of electronic bill payments is additional security. If you pay a bill with a check and put it in the mail, you really have no idea where it might end up. In theory, if someone else were to find that check, that person would not be able to cash it.
Although in today's society, you cannot be too careful. There are many hackers and unsavory people just waiting for someone to give them a way to steal money. I am not trying to paint an unrealistic picture for you by saying the banks are impenetrable and cannot be hacked. You only have to watch the news to know that is not true.
Several Layers of Security Protocols
Nothing is 100 percent safe, but banks have the best defenses to keep your money and transactions safe. They use the best security and several layers of protocols are put in place to keep all of your information and all their customer's information safe. Some of the layers a bank uses to keep your information safe are multi-factor authentication. That is a process where you receive a passcode via text or email to a previously verified address and then you put it in the website before you move forward.
Additional ways that a bank may use to keep your information safe is unique usernames and passwords. They create several layers of security to prevent outsiders from hacking into their system. Banks encrypt your data so it is hidden or scrambled when it is being transmitted electronically. Banks will automatically log you off the session on their website if you have been idle for too long. Too long may be different for each bank, but it is probably somewhere between 10 to 15 minutes.
Everything about Bills in One Place
Advantage #3 - Organization
One of the biggest advantages of electronic bill payments for me is the fact that it helps keep me organized.
No Multiple Stacks of Bills
When I had a stack of bills that I had to sort through and make sure they were all paid timely, I was always paying something at the wrong time. Fortunately, I ended up paying bills too early, so everything was paid on time. But, inevitably, I lost track of something.
Money is Automatically Withdrawn
Writing checks was always a nightmare for me, too. It would make me crazy when someone would hold on to a check and not cash it for weeks. Then I had to balance a checkbook and make sure every check was cashed. It never really worked for me. Somehow, all the bills were paid and I had money in my bank account, but I am not really sure how it happened.
Now, I use electronic bill pay and it automatically comes out of my bank account. I do not have to wait for anyone to cash a check before the money comes out of my account. I can tell right away if a bill was paid. I can also tell right away if something was not paid. The best part is I can do all of this in one place. No longer do I have to worry about if I did the math right in my bank account. I cannot tell you the number of times I had to rewrite numbers over top of one another because I did the math wrong. Electronic bill pay keeps my bills straight and as a result, I have way less stress.
Advantage #4 - Time-Saving
If you are anything like me, you do not have much time to spare. I feel like every minute of my day is being used for something and I never have enough time. I cannot tell you the number of times I look at a clock and wonder where the time went. It is crazy to me how time just flies by. I no longer have the time to ponder my bills. I need to get them paid as quickly and efficiently as possible. That is another one of the great advantages of electronic bill payments. Not only is it a great way to keep track of bills and payments, but it saves time.
Yes, it does take a little bit of time upfront to set up all of your bills. I promise you that is time well spent. You only have to do it one time and then you are set. Well, until you add or change a bill, but if they never change (yeah, right), you are all set. Then it only takes you minutes to pay your bills. I am not kidding, you can pay all of your bills in just minutes.
Advantage #5 - Environmentally Friendly
Do you remember when you were a little kid and you used to love getting mail? Do you remember the point at which that changed? I do. It was when I started getting bills. I suddenly no longer liked mail in my name. There was paper everywhere. I had envelopes stuffed with pages of statements that I really did not want to read. All I needed to know was how much was the bill and when did I have to pay it. I felt like my mailbox was just becoming overstuffed with junk.
Now it seems that junk mail is being sent with the intention of looking like real mail. I get as many statements and bills online as I can but still, there is always a piece of mail that manages to get me.
No More Paper
One of the greatest advantages of electronic bill payments was reducing the paper being sent to me in the mail. It is not only great for me but also great for the environment. I recycle but not everyone does. How much of that paper is being thrown away each year?
I am willing to bet that numbers are just increasing because the number of bills we pay increases each year. You are not just doing yourself a favor, but you are also doing one for your environment.
Advantage #6 - Consolidation
I mentioned a little bit ago in this article about how hard it was for me to have my bills in a messy pile of paper. I just could not wrap my head around all of that paper. However, seeing all of my banking information in black and white makes it much easier to understand what needs to be paid and when.
I realize not everyone is like me and some of you like having that stack of paper. You take the first bill off the top and pay it. Then you take the next bill and pay it. You continue this process until all of the bills are paid, or until you run out of money. If that is your system and it works for you, I am not trying to mess it up. It just did not work for me. One of the great advantages of electronic bill payments for me is being able to consolidate all of my bills in one place.
I do not have to open envelopes and get paper cuts to do it. They are all right in front of me on screen. I know what has been paid and what has not. I do not have to worry about if I stacked the bills in the right order. It is clearly marked which bill is due and when. In my old system, I had to hope that when I put the bills in order, I put them in proper sequence. I did not always get it right, but fortunately, I never messed up anything too badly. I had some awareness of what needed to be paid and when.
Advantage #7 - Better Money Management
Throughout this article I have touched on one of the major advantages of electronic bill payments, which is it can help you manage your bills. It is a simple way to get control of your bills and have better overall money management. While you are paying your bills, you can check your balances and make sure other bills have been paid.
Payment History and Alerts
You can access your payment history, so you can see all of the bills that have been paid. You can also see each individual bill that has been paid or is scheduled to be paid. You can set up alerts, via text or email, to remind you that a bill needs to be paid. Some banks may alert you when a bill has posted and is paid. Money management is not just about handling the money you have. It is also about understanding your income and your expenses and being able to balance the two. When you see all the numbers in black and white, it is easier to gain a better understanding of your expenses.
Spending Categories
When you use online banking, you can put your spending into categories so you know where you are spending the most money. When you see where you are spending your money, you can also make determinations where you might need to cut spending. Do not fear, I talk more about budgeting and spending a little further down, so keep reading because those are important topics.
Should I Negotiate My Bills?
One of the advantages of electronic bill payments is you can see how much you are paying for your bills. This may help you decide if you should negotiate your bills to see if you can have them reduced. There are some easy bills with which you can start. You have to understand that to properly negotiate bills, it takes time and research.
Ask For Special Deals
First, you have to know what your goal is with negotiating. You can start with your cable or internet bills. These tend to be a little easier because most companies typically offer special deals. There may be some specials happening right now that you can get to lower your bill. You will not know unless you ask. Typically, they do not contact you to offer you these deals. They usually only offer them when you ask, or when they are trying to up-sell you.
Know What You Want
Do some research about your internet provider and the competition. See what they both have to offer. You may find out you have the best possible deal. You could also find out that you have room to negotiate. You must go into it knowing your end goal. Also keep in mind that the person to whom you are talking does not make the rules. They are just enforcing the rules. Remain calm and kind while talking to that person, even if you do not like what they are saying.
That person is trying to do a job and being mean will not get you anywhere. It does not make anyone want to help you. Do not take the conversation personally. This person does not know you. If at the end of the conversation, you cannot get a better deal, then thank the person for their time and end the call. You can decide if you want to find another provider that might be more willing to work with you.
Do I Need A Budget?
Everyone needs a budget. Even if you are taking all the advantages of electronic bill payments, you should still have a budget. A budget is not intended to control you or dictate what you can buy. Remember, you create your own budget. There is no one else making it for you or telling you what to do. This is your money and ultimately you can spend it however you want.
Creating a budget helps keep you on track and towards your financial goals. First, you have to know what goals you want to achieve before you can determine the steps to get there. Are you interested in paying off your debt, saving more money, reducing your bills? Perhaps you would like to do all three of them. There is no wrong answer. Again, this is your budget and you need to decide what is right for you.
Once you determine your goal(s), you must put your numbers on paper. In one column, list all of your income and add it together to get a number. In a separate column, write down all of your expenses. Do not leave out any of them. This is for you and it is not the time to hide things from yourself. Once you add up all of your expenses, you subtract your expenses from your income. Hopefully, you are left with a positive number. This is the money you have each month to put towards your goals. You may not be happy with that number and you may need to make some changes.
Save Money...Who Me?
So, you are taking all the advantages of electronic bill payments and realize that you are not working towards your goals. Perhaps you are spending more than you earn. It is possible that you may spend less than you earn, but not that much less. No matter what it is, there are probably some spending cuts that need to occur. There are some easy ways to cut spending and save money. I am going to start with them. We all like to save money the easy way.
Cancel Unnecessary Subscriptions
The first place I always start is by cutting out the items for which you pay that you do not use. That gym membership is a great place to start. If you have a gym membership that you are not using, cancel it right now. I will wait. Once you do that, check any subscription services that you get. You know the ones that shop automatically and charge your credit card. You never really notice until you have too much toilet paper and your closet is busting at the seams.
Decide if you actually need that service. If you do, change the frequency. Or better yet, change it so that you have to request it to ship. Do not have it ship automatically because you end up with much more than you need.
Lower Your Utility Bill
Another great place to make a minor change that you probably will not notice is your utilities. If you change the temperature of your thermostat by a couple of degrees, you will see hundreds of dollars of savings per year. Bump the temperature up two degrees in the summer and down two degrees in the winter and it will not be that noticeable in the house. It will be completely noticeable in your monthly bill. You should unplug anything that is not in use. This small changes will save you big time.
Conclusion
I have given you a lot of information about the advantages of electronic bill payments. While online payments scare some people, it truly is no more dangerous than sending a check in the mail. It may actually even be a little safer. You should give it a try for a month or two and see how it improves your life. If you decide it is not for you, you can always switch back to writing checks.