Wednesday 2 January 2008

Paying Bills

We all have bills to pay. Most are regular and some happen infrequently. The important thing is to have the money budgeted to pay them, and to pay them on time.

I don't use a precise budget - although many years ago I went through the process of recording all my regular expenses for a year and working out a detailed budget, these days I know what my normal total monthly spend will be, and get enough salary deposited into my credit union account to cover the expenses. The rest of my salary has been 'sacrificed' and gets paid into my retirement account as an additional employer contribution.

I used to pay nearly all my bills via phone or internet using my main credit card account in order to get rewards points which I redeemed for a credit onto my credit card account. As I always pay my credit card balance off in full each month, this was a better method of bill payment than cash or cheque. Unfortunately recent changes by the Australian competition authority meant that some bill payments made by credit card now attract an additional fee from the biller, making it not worthwhile paying those bill using a credit card. So, these days I now pay some bills using my credit card, but others now have to be paid directly from my credit union account using BPay.

I still get my bills sent via mail, as email isn't 100% reliable. I've also had many different email accounts over the years, some of which are no longer in use, so getting bills via email would be a nuisance when I change email accounts. (For this reason I also opt for getting dividend advice sent via mail rather than electronically). I cross as paid any bills setup from automatic payment (by direct debit) and file them away. Those that require payment are stored in my briefcase in order of due date, so I can flick through the bills once a week and pay them via phone or BPay during my lunch break.

If there is an occasional unexpected bill (such a for root canal dental work or a medical checkup) I can transfer some extra cash from my online savings account into my main credit union account to cover the extra amount that month. I don't maintain an 'emergency fund' as such, as I have a significant amount of cash invested online that was borrowed at 0% via a CC balance transfer offer, so I can always draw on that and repay it by liquidating some of my stock or mutual fund investments if needs be.

Copyright Enough Wealth 2007

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