We’ve all been there – that point in our lives where we have to get serious about budgeting.
When it’s time to sit down and figure out exactly what’s coming in and what needs to go out.
Without a proper budget and without knowing the dollar amount of our monthly recurring bills – utilities, credit cards, car payment.., etc. generally, we’re setting ourselves up for financial disaster.
Some of you may be thinking, Well, what the heck does she know? She’s not an expert.
You’re right; I’m not an expert. I have, though, spent the last decade in banking. I started as a part-time teller and organically grew to become a Personal Banker.
While my job included opening deposit accounts and processing loan applications, a lot of the time I ended up – Yep, you guessed it – budgeting for people. This came about because someone wanted credit extended to them, but getting credit is something that is earned by having a long lasting history of on-time payments.
So even if I couldn’t help them in the way they intended, I could, at the very least, set them on the right path to getting there.
We’ve all heard of the envelope system. It’s an effective way to get your bills paid on time, but I also believe it’s a lot of work, which means at some point it’s going to get put off again and again until it’s eventually not even a thing anymore.
The method I recommend to get your bills paid on time is very simple.
Open a Second Checking Account
Open the second checking for bills only and do not open a debit card with it. I cannot stress that enough. The reason why is this – we may have good intentions of using it just for bills, but there will come a day when you’re low on your general account and think, I’ll just use it this once for gas. That’s it, my friends, when we do it once; we’ll do it again and again, and there goes your bill budget. Right out the window.
If you’re wondering how you’re going to get your bills paid on time without a debit card, I have two options for you.
- Online Banking Bill Pay
- Standard Checks – Yep, we’re taking it old school.
I know most Financial Institutions nowadays offer Bill Pay for free, standard with your Online Banking Account. If you aren’t already set up with Online Banking, the majority of banks enable you to do this via their website. Again, this is generally a free service offered to their customers.
Once you are all set up with Bill Pay, log in and set up your Payees. You can schedule your bills as one-time or recurring payments. These payments will be sent either electronically or by regular check from your bank to your payee – to the address and for the account number you’ve provided.
Furthermore, if you aren’t comfortable or trusting in Online Bill Pay, that’s okay. You can only order a box of checks when opening your account and write them manually. My personal recommendation, though, would be the Bill Pay and I’ll explain why in just a moment.
Now that you’re all set up with your second account
Let’s get to budgeting! <– I’m such a nerd.
So, let’s get all of your monthly recurring bills out and calculate the total. Take that total and divide it by 4.
Mortgage $900 + Car Payment $400 + Insurance $100 + Electric $150 + Water $50 = 1600
$1600/4 (weeks) = $400
This is the dollar amount you’re going to transfer weekly into your second checking account. If you choose to use Online Banking, this is a very simple task to do. No longer are the days where you have to drag your children to the boring bank just to sign some paperwork to get an automatic transfer going.
In conclusion, you can set up a weekly transfer, on the day of your choosing, to your brand new second checking account, specifically to get your bills paid on time, every time. 🙂
Lots of Luv,
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*I am not, nor claim to be a financial advisor. The suggestions within this post are directly related to my personal experience and recommendations throughout my banking career.