Readings Ways to Pay a Bill The Internet has revolutionized the way we do just about everything. We meet new people, raise money to start a business, get the news, watch TV, and book a vacation. Because of our increased interconnectedness, managing money has gotten much easier too. Consumers can check the balance in their bank accounts on a smartphone. Money can be transferred anywhere in the world where there is access to the Internet. Bills can be paid in minutes instead of hours. Not too long ago, bill paying was a monthly ritual that took a better part ofa day. The payer had to sit down at a desk and open a stack of mail that had been piling up all month. One by one, a check had to be written, put into a stamped envelope, and then taken to the post office. All the checks were carefully logged into a register. The initial balance of the account was noted from a bank statement. Used checks were sent back to the customer who ticked them off in the register. Those newly written checks were subtracted from the initial balance. This is how people \"balanced" a checkbook. In the past, getting paid meant getting a \"live\" check. You then had to drive to your bank, walk inside, and give the check to a teller. The deposit was logged in a check register or passbook. In the 19805, ATMs made this process faster and easier, but it still required yourtime and a special trip. Today, wherever there is Internet access, people can take care of their banking. Bills can be paid, money sent to another person, and accounts can be opened. Banks will even allow customers to apply for a loan remotely. Banking used to require several hours every month. Today, everything consumers need to do takes only minutes. If you owe money to a bank or a utility, they expect to be paid on time every month. This has never been easier. Paying a bill can happen with a few clicks or no clicks at all. These methods include: . Auto debit: the payee can withdraw money from your bank account on the same day every month. Credit card 0 payment: the payee can charge your credit card on the same day every month. 0 Selfpay from a bank account: By syncing your bank account to your payee's website, a payer can select the amount of money to pay, choose a date, then click \"go." 0 Pay by phone: Some companies have automated phone service. The customer enters credit card or bank routing numbers over the phone. 0 Pay in person: Some companies, such as cellphone service providers, have retail stores. Customers can go and pay by credit card, cash, or check in person. Some stores, such as drugstores, have windows at which bills can be paid. 0 Send a check: It is the oldfashioned way to pay a bill, but it still works. Many businesses are encouraging people to use alternative methods, because paying by mail is the most costly for the company. 0 Use an online service: Companies offer products like QuickBooks that can help manage cash flow in and out of your household. It is especially useful ifyou own a small business. 0 Hire an accountant: Professional money managers make hundreds of dollars per hour. These services are for wealthy people. Regardless of how you pay your bills, it is essential that they arrive on time and are paid in full. Late and insufcient payments will follow your good name for seven years or more. This will make it more difficult for you to borrow money in the future. Think about it, if a company is delivering you electricity, don't they deserve to be paid for it? Ifyou borrow someone's money to buy a car, shouldn't you honor the contract and pay it on time? Conscientious consumers are timely [page i payers. This tenacity and responsibility pays off in the end. Developing Your System As people get older, they get set in their ways. Grandparents have daily routines that they nd comforting and reassuring. Young people are less likely to use the same products, eat at the same restaurants, or prepare for the day the same way every time. With one exception, there should be an unbreakable routine in your life: paying bills. Your house or apartment should have a desk or table where you sit and review your finances. Prepare something to drink, get ofce supplies ready, and get your computer on the Internet. It is best if you follow this ritual at the beginning of every month. Not all your bills will be due at the same time, but you can schedule payments from your bank to be sent any time of the month. Somewhere, you should keep all your correspondence and bills in the same place. Many families have a basket or tray in which all these letters wait for the day at the beginning of the month. Most of the mail we get is junk mail. These are advertisements and solicitations from businesses. In fact, many of them are made to look like important letters like checks or legal notices. As time goes on, you will become skilled at spotting these facsimiles. It is a good idea to dispose of these notices in a secure way by shredding them at home. Some cities offer a \"shredding day" on which residents can bring their private documents and have them disposed of by professionals. After you have opened all your mail, put all the bills to be paid into a pile. It can be helpful to keep a spreadsheet on your computer or online and create a monthly budget. Have a list of all companies to whom you owe a monthly sum down the left hand side. The months of the year should run across the top. You will need a checking account and checkbookfor bills that cannot be paid electronically. Many times, these payees will provide an envelope, but you must provide the stamp. Make sure to have a book of stamps handy. Write these checks and enter them into your spreadsheet. After that, log into your bank account and pay what you can directly from your bank account. To link your bank and electric company, for instance, you will need to establish an online account on that company's website. Get a copy of your bill, enter your account number, username, and password. After a few days or weeks, you will be able to pay your electric bill directly from your bank account online. You may even be able to see a copy of your bill through your bank. Type in the amount you want to send, and then click to make the payment. Keep track of your ba nk balance. Repeat this for every company you have linked to your bank. More convenient still, you can have bills automatically charged to a credit card or deducted from a bank account. This is becoming more and more common. To track these bills, you will need your credit card statement or log into your account. Online services and subscriptions often require a credit or debit card to open. Netflix, Hulu, Spotify, and Amazon Prime each require automatic payment methods. While these amounts are usually not large, you should track them carefully and enter them onto your spreadsheet. Some bills like your rent, mortgage payment, and insurance payments are fixed expenses. That is, they are the same every month. Entertainment services are also fixed. But be sure to watch out for subscription creep. This is a sneaky practice of some companies to raise your subscription price without you noticing. A company must inform you in some manner. Emails, letters, or a notice on their website are all legally appropriate ways to increase a price. Many consumers miss these notices. Months may go by without them noticing. Remember, at some point, you agreed to their terms of service by clicking a box. If you agreed to pay for the service, and the price goes up without you noticing, you have to pay it. If you catch them in the act, you can call their customer service department and negotiate for a lower price. Remember, keep close track ofyour spending. You need to save for retirement and emergencies. If you cannot afford this type of savings, you should review your spending and eliminate any items that might not be necessary. In fact, it is wise to consider eliminating any line item you can. A line item is any expense that occupies a space on your spreadsheet. Adding a new category to your monthly budget should be considered carefully. p@g@ 2 Keeping Your Head Above Water Life happens. Sometimes it is wonderful and splendid. Other times it is heartbreaking. When bad things surprise you, finances can become particularly stressful. It is one thing to be sick, be unemployed, or lose a loved one. Worrying about money on top of that can be particularly stressful. People in your family can probably tell you stories. Setting money aside for emergencies can make the pitfalls of life less traumatic. At some point, you will be out of work. Your lack of income does not mean your creditors will not want their debt payments or utility companies will not want their bills paid. You will need to adjust and move quickly. The solution is simple. Reduce spending in every way possible. Imagine that you are older, and you just lost yourjob. You need to nd some temporary income and reduce spending as much as possible. Here are some suggestions: oApply for unemployment insurance: Every state in the U.5. has a system by which an unemployed person can access this supplemental income. Go online, talk to friends, or ask your company's human resources department. oSit down and review your budget: Anything not necessary for living is fair game for elimination. Entertainment dollars, music subscriptions, cable TV, boutique cellphone plans, and expensive morning coffee can be pruned immediately. Utility bills like electricity can be reduced by modifying behavior. 0 Match your unemployment insurance to your expenses: While this can be a challenge, this will ensure that you will not have to incur more debt in order to pay your bills. oUse your emergency savings sparingly: Your budget should include a small pool of money that equals a few months of your income. Tap into this savings as little as possible. You never know how long you will be out of work. oLet everyone you know you are looking for a iob: A good lead can come from anywhere. Someone you know may have a connection in a company that you do not realize. The odds are likely that you will spend a portion of our work life unemployed. When you are working, you should always keep that in the back of your mind. Economies can worsen, or companies make mistakes. Cities go into decline and the jobs disa ppea r. Good personal finance practices consider worstcase scenarios. At some point in life, you might have people who depend on you. Be sure to set emergency money aside. Tighten your budget, even when you are making good money. Having money set aside for unexpected unemployment or misfortune will give you peace of mind. p@g@ 3