Automate to Liberate
Posted by Gail | Filed under Money Management
I’m all for making things as easy as possible. I’m a pretty busy girl and I am not particularly fond of doing repetitive things. That’s one reason I automate my finances as much as I can. Many of my regular bills go directly to a credit card: whether it’s the phone bill or the satellite bill, my cell phone or my heating, having it go through my credit card achieves three things:
- The bills get paid without me having to do a thing.
- There are fewer transactions through my bank account reducing my bank fees (hey, a PC account isn’t an option for me because of where I live.)
- I earn points on all those bills going through my credit card.
My favorite is the fact that the bills get paid without me having to do a thing. It’s the same reason I auto save. I have a couple of accounts set up at ING Direct into which my planned spending and emergency savings go. Viola! Saving without thinking. The money is gone as soon as it hits the bank so I’m not tempted to spend it. When I do need to use some of that Planned Spending money to pay for something, I transfer it back to my transaction account on the internet. Easy-peasy.
Speaking of Planned Spending, one of the things I get lots of letters about is how to deal with expenses that pop up infrequently during the year: back to school shopping, Christmas, birthdays, the kids’ hockey fees. Hey, it’s not like you don’t know you’re going to have to drop some bucks on those things, right? So why not plan for your spending?
Let’s say that your sports fees come due in September, just when you also have to pay for back-to-school shopping; you’d be delusional to think extra money will just appear from nowhere. Instead, if you start planning in October for 12 months worth of automated planned spending on sports, you’d only have to find 1/12th of your sports budget every month to ensure you had what you needed when the time came to foot the bill.
While lots of people equate being financially successful with having the will power to do the right things every day, I’m here to tell you that being financially successful is more about establishing the right habits.
Let me ask you this: Why do you brush your teeth?
No, it’s not a rhetorical question. Why do you brush your teeth?
Some people will say, “To avoid cavities.” Some will say, “To avoid bad breath.” Some to avoid The Dentist. Whatever reason you have for brushing your teeth I’m going to disagree with you… unless you said, “Because it’s a habit.”
Most people don’t think to themselves, (said in a deep voice) “Hmmmm, I’ll have bad breath if I don’t brush my teeth this morning.” They just brush their teeth because it’s part of their daily ablutions. It’s automatic.
Automating your money can make your life easier and give you the time you need to really plan carefully to achieve your goals. With many of the small details taking care of themselves, you move from doing the same repetitive actions every month, to monitoring your big picture and using your time to achieve the things that are really important to you.
Okay, it’s your turn. Tell me how you’ve automated your money and liberated your time?
November 19, 2009 at 7:32 am
I’ve automated the debt repayments so that I don’t have to think about it. everything else, we avoid automation. We do this so that we know better what is coming into our account and out of our account. Once we are out of debt I might go forward and automate some more things like savings and bill payments using a credit card.
regards,
Jason
November 19, 2009 at 7:46 am
The only thing I have automated is my OSAP payments. I do everything else myself via the internet, I prefer it that way. I like to though, it is not like it is a chore or something.
November 19, 2009 at 7:55 am
Hi Gail
I have RSP deductions and money for emergency spending automatically taken out each month. I do move money to savings and to planned spending manually (not totally automated yet). Most bills (mortgage, insurances, car loan) come out of my account automatically. I do have to pay other bills when they arrive.
I don’t have fees to worry about at Canada Trust (any number of chequing accounts are no fee once you are 60).
However, at another bank – RBC – I’m not impressed with their approach to only allowing ONE chequing account to be without a service fee for a married couple over age 60. I would not have thought that they were so old fashioned as to believe that having only one no fee chequing account (held either jointly or separately) is enough for married couples in today’s world.
I find this repugnant. Am I not an equally important person in my own right to be allowed a separate no fee chequing account in addition to a joint account in a marriage? So much for equality at this bank and yes, I am going to change where my pay cheque is deposited.
November 19, 2009 at 7:58 am
I set up bi-weekly deposits to my TFSA and 2 savings accts plus bi-weekly payments to my credit cards to cover what I’ve budgeted for groceries, car gas, cable, etc. that already gets billed to by CC. I LOOOOVEE automation. If I over spend, then I take it out of the money in one or both of my savings accts, since one is for entertainment and the other is for clothing/gifts…generally one or the other is the reason I overspent in the first place.
Gail, for PC, you should be able to set it up on-line, and as long as there’s a CIBC in your area, you can use the bank machines for free…just a thought.
November 19, 2009 at 8:11 am
About 75% of my finances are automated – my RRSP contributions, TFSA, Emergency Fund and house fund contributions all come out automatically the same day I get paid. My charitable donations are monthly contributions and come out automatically out of my account.
I don’t do the utility bills though for some reason.
I also automated my record keeping with a financial software that downloads data from all my accounts in seconds, has eliminated all the stress and work of monthly account reconciliation, set up all those automatic transfers to accounts so I don’t have to manually enter them, and keeps track of the value of my investments. So I know exactly, on any given moment, how much money is in each of my accounts, how much is in my planned spending, how well (or poorly) my investments are doing, and all sorts of analytical tools – like my percentage savings rate against my gross and net, how well I’m doing on my budget on a monthly, quarterly, yearly basis etc.
I couldn’t imagine doing my finances without a software to make it easy-peasy. It would just take too long. So I bought the software to automate things, reduce the amount of time and effort it takes to be on top of my finances and reduce stress.
November 19, 2009 at 8:20 am
I love automated payments. We paid off 16k in the past year (student loans- OSAP and RBC) by setting up weekly automated payments, and we now have a 6k travel fund done the same way.
It’s great because it doesn’t let you get used to having the money in your account, and it doesn’t require my sieve of a brain to remember to transfer $$$ every week.
When I got a raise this year, the first thing I did was automatically set the raise to go into the travel fund. I never saw it, so I never missed it, but it’s ultimately going towards what we want it to [now that debt has been paid off]!
November 19, 2009 at 8:26 am
I have atuo accounts at ING for the following – and the payments are bi weekly on my payday. I also have my mortgage, debt repayment, RESP, RRSP, come out of my account automatically on payday too
Here are the accounts:
TFSA – Emergency
Vacation
Property Taxes
Union Fees
House Fund
Sports
Medical
Even thought some of the accounts will only ever had a few $100 in them, it is great as the money is there and I know when I need it I get it~~ when I register my kid in gymnastics, the money is there, when I need to get orthotics for my shoes and wait for insurance to send back the money, it is right there. It takes some time to get started and build up the account, but I love this way of savings. At ING you can open as many accounts as you want, you can nickname them whatever you want
for Christmas, I added a jar and when got a raise at work in Sept, the extra money I put in the jar. Then I separated the jars into my child, me, my husband, and everyone else! That way we all have money to buy each other stuff.
November 19, 2009 at 8:30 am
Love this column Gail (and the new website layout!) It’s a good reminder to review and update our possible automation options – more and more utility companies, etc. are now accepting auto CC payments which I love – more points!
For years we paid our Car & Home insurance monthly, just kept renewing and paying that way out of habit. Last year we used some savings to pay in full (by Credit Card so we got points, then paid off right away) We set up an ING account just for insurance and now our monthly “payments” go into our ING so next year the money will be there to pay off the full bill when it arrives – it’s nice to feel a bit “ahead of the game” this way. Love, love, love my ING accounts – we’re eagerly watching the sales right now for trips south in Jan/Feb – again we planned ahead for the last year our “monthly payments” have been automatically going into the “Vacation South” account – we can book at November prices and be paid in full before we go – now that makes for a really relaxing week on the beach!
Thanks again Gail for your wonderful advice and good cheer! Once again, all of the above was inspired by you!
November 19, 2009 at 8:32 am
I must be the only person here who DOESNT like automated payments. The only thing I have automated is a weekly stock purchase, but that’s throuh my employer, and my rent (had no choice in the matter). I actually like sitting down and punching in the numbers on the internet. Saving has become something of a form of entertainment for me, so its fun to transfer the money over to ING. The bills, I pay the same day they arrive.
I do, however, have most of my bills paperless…..but that’s probably because I love my computer, and check out the CC balance/transactions everyday online. OMGosh…I sound like I have no life…pathetic…lol!
November 19, 2009 at 9:02 am
We have almost all our bills automatically withdrawn from our account or charged to the credit card. For bills that I have to pay (eg. credit card), I set it up auto – ie. I set up a postdated automatic withdrawal. It does ensure that all the bills get paid and I reap reward points where applicable. When we had an outstanding loan, I set up automated extra payments to get rid of it faster.
There is one thing though with automated bill paying – ALWAYS look over your bills. Sure, they’re being paid on time but are they charging you crazy rates or for crazy extras that you don’t use/need. (Rogers comes to mind here.)
RESP and RRSPs are also automatically taken care of.
November 19, 2009 at 9:10 am
I do have some auto-savings withdrawals, but I am the paranoid Luddite, so I like to do most things on my own.
I do have work long shifts, put in regular OT and have a 21 yr-old son who has not yet found himself so
what I DO need is an auto-debit for Botox!!!
November 19, 2009 at 9:10 am
We do it like you Gail, automated through our credit card so we get the points which then pay for the oil changes on the car. We did this for two reasons: 1- to get the points, 2-we live in the boonies and getting to a bank is not a dependable monthly trip. I refuse to internet bank because I prefer talking to a live body about my money, someone who understands what it means to me.
November 19, 2009 at 9:13 am
I just pay the bills online with the bank.
November 19, 2009 at 9:17 am
Mine is a mix. Any that can go on the CC do because my CC offers 2% cash back on recurring bills. Those that are of a set amount each month get automatically withdrawn. Since its the same amount each month, its a no brainer. Those that fluctuate get paid by online banking. This way I can keep track of what they are and not get any suprises.
My savings and planned spending are automatic. Every payday a certain amount goes to ING and gets distributed among my various planned spending and TFSA accounts. It entered as a bill in my budget and its a no brainer way to save for those expenses that you know will come up! I love it!
November 19, 2009 at 9:27 am
I am not a big fan of automated payments. I am a hands on type of person, who needs to pay the bills myself. I love playing with numbers and just letting that bill payment be automatically directed to my credit card would not sit well with me at all. I need to see it, feel it and watch it be deducted from my balance, lol.
That being said, I have 2 automatic deductions made from my paycheque every 2 weeks. One is my RRSP, which my company matches up to 4% of my salary, and the other is my Canada Savings Bond contribution. We have 3 children in scouting, and next year we’ll have a 4th. My contributions to the CSB pay for scouting every September.
November 19, 2009 at 9:33 am
I was surpised when I read this to discover how little I DO automate. The mortgage is automated as is my consolidated loan and my vehicle loan. Honestly, I don’t recall being given any other option when I signed onto those. The dates of my two loans are fixed in my brain and that day, I log dutifully on to my bank account to see it go out.
Beyond that, none of my regular bills are automated, nor is my savings. While it may be a bit tedious, I am a bit of a hands on girl and I like the physical act of logging into my account and making the payments for utilities and my regulated (and planned for ) credit card use.
I think, if I did not have this bit of control, I might lose touch with what bills I have and not think of them as real expenses.
November 19, 2009 at 9:48 am
We have our phone, cell and internet going directly to the credit card. We also have our Tim Horton’s coffee cards auto reloading from the CC when they drop below $5. You can’t use VISA in the store, but you can use it to reload the card. We don’t buy a lot of coffees anymore but at least we earn mileage when we do.
Our mortgage and property taxes automatically come out of the bank account (and cannot be sent to the credit card – I’ve tried). The alarm monitoring fee, life/house/car insurance all still automatically come off the bank account, but I’m in the process of having them all these autopays redirected to the credit card. The only recurring bill not currently on autopay to either the bank account or CC, is Ontario Hydro which claims we can’t have it set up to a credit card, but have pointed me at an online payment system called epost (run by Canada Post) where I may be able to set up the ability to manually pay by CC each month. Not as good as autopay, but at least I get the flight miles, which is important when your electic bills are ~$5k per year. We have our LOC (zero balance) set to auto pay the minimum due should there ever be a balance on it – that way we’re never late. Any amount we want to pay above the minimum would be a separate manual online payment.
Love autopay, but love it best when it goes on my credit card and I get the miles. We’re working on earning the 4th ticket to Europe for next summer’s holiday and should reach that by February if we continue to run averything possible through it. I’m frankly annoyed when I can’t pay for something on my VISA. In the past 2 weeks we’ve had 3 dentist checkups, 1 extra visit for a filling, and a prescription eyeglass purchase. For my benefit plan we pay upfront for everything and then we’re reimbursed. $1000 in expenses = 1000 miles for me. It’s not like I go to the dentist more often to get points, but I’m sure happy to take them.
FYI – for those with a CC which gives you 1.5 miles (rather than 1) on charges at grocery stores, if you take cash when you pay for the groceries you may also get 1.5 miles on the cash! It all depends on whether your grocery store codes the groceries and cash differently when they submit the charge to the credit card company. We don’t spend much cash, but we never take if from an ATM anymore. We want the miles we get by taking it at the grocery store (where they lump it in with the grocery purchase and it doesn’t appear as a cash advance). We pay off the VISA every week to balance up the Excel spreadsheet and we’re always on top of it. I’ve never paid a cent of interest since we got the card.
November 19, 2009 at 10:15 am
One more thought for those on the fence about the benefits of autopay. When you go on vacation, everything gets paid on time while you’re away. No need to prepay bills in advance so you don’t get hit with late payments.
Does anyone actually go to a bank for “normal” transactions anymore? Yes they are needed for special services like certified cheques, or signing papers for mortgages, etc. The last time I was in my bank was July 2008 when I picked up the Euros I’d ordered online for our trip. I likely won’t go again until I pick up Euros next summer for our next trip. My mom seems to have to physically go to the bank to “do some banking” on a weekly basis. I’ve offered to get her set up for bill payment online and show her how to do account transfers, but she claims she’s just not a techie and doesn’t plan to learn at this stage. Maybe it’s a generational thing. She sees the bank as a place you go to handle all financial transactions. I see it as a website and helpline, with the option of a physical building and live person for only the very few transactions which can’t be done online.
November 19, 2009 at 10:25 am
Automated pay is great. Just reading a few posts and hoping that a) people are not paying banking fees for automated pay (i don’t) b) people aren’t paying credit card fees to have these reward cards (i don’t).
When it comes to reward cards you need to sit down and do the math in terms of what you’re actually getting for what you pay. To have to spend $30,000 of real money for a free vacation is all good assuming you paid all of your monthly cc bills in full each month and don’t pay an annual fee for the card. If that’s not the case for those that use their cards for these rewards, when you do the math you’ll see that nothing is for free and you’re paying something for an illusion at the end.
November 19, 2009 at 10:39 am
?? Credit cards with points/miles. Sorry a little off topic.
I am looking for a new credit card to gain some points/miles. Does anyone have any suggestion of a card that they like?
I would like to use the points/miles to travel, but it is not a guarantee that I will use it up every year, so they can’t expire.
I currently have PC MC, but they are becoming too restrictive, I can only spend the points at the store.
November 19, 2009 at 11:00 am
I’m also in the very little automated category. My savings, planned spending and RRSP contributions are automated. Then each pay day I sit down with my incoming bills for payment and pay the suckers. Also each pay day i move money to debt repayment, and take out the jar money for the next two weeks. This frees up transactions on my account, and makes sure I don’t have late charges on the bills. it gives me the freedom to contact those bill people I owe if there is an issue on my bill and get it straightened out prior to payment. Also, since I now love to pay bills I have a nifty little stamp that I apply once everything is paid.
November 19, 2009 at 11:00 am
All of my RSPs, other savings, planned spending, mortgages, and insurance is automatic. The only things I have to do myself are regular bills (cable, phone, etc) and extra payments to my HELOC. I may have to reconsider my set up after reading this and have everything automatically paid off of my credit cards. I’m not sure why I’ve never considered this before.
to id: I have a standard airmiles mastercard. airmiles never expire.
November 19, 2009 at 11:05 am
For us, it’s taking the non-monthly purchases and figuring out the time line that has totally liberated us. It really has changed our life, and makes us totally feel rich, despite an extremely negative net worth (we’re working on it, getting closer to a positive net worth every day!).
We started out with haircuts – they’re every six weeks, not every month. So we take the total amount needed for family haircuts, divide in two and set that amount aside in planned spending. Voila – the money is there when you need it.
We’ve also started a Christmas account and are looking forward to starting a vacation account in January.
Most of our discoveries about random needs are found out accidentally. Like moving from BC to Alberta, and needing to spend $500 on snow tires. And realizing that we’ll need to have $150 every six months to get the tires exchanged for the season. So we divided $150 by six and are now putting $25 a month into a tire account. Then we asked how long the tires should last – four years – and took $500, divided by 48 months, and are now also setting aside $10.50 a month for new snow tires. We can find $10.50 a month, but definitely can’t find an extra $500.
Anyone else have a list of infrequent purchases? We’re trying to figure out things in advance ….
Thanks Gail for showing us the way to liberation!
November 19, 2009 at 11:06 am
I have automated my savings, and my debt repayment. My partner an I also recently set up a joint account where we automatically put funds bi-weekly to cover rent and utility bills – it’s great!
The only thing that’s not automated is paying of my CC bill each month – but that’s an easy online transaction.
November 19, 2009 at 11:28 am
I have automated savings (RRSP, RESP, TFSA and Planned Savings) but do not have automatic bill payments. Due to my husbands job, we move frequently and, sometimes, on short notice. I have found too many utilities continue to take monthly payments out of my account after I have cancelled the service and moved. One company (a phone/internet provider) continued to take the monthly payment out of my account for four months after I cancelled. It took months to get the money returned.
One thing that has liberated our financial life is our “Freedom Account”. That is what I call our planned spending account because it gives me the freedom to live life without worrying about all the expenses that are NOT regular monthly bills. I have one internet account that I transfer a set monthly amount into. Then I use that money to pay for things that come up unexpectedly (like a vehicle repair) or regularly but not monthly (dental expenses, kids activity fees). To keep track of the money in the one internet account, I bought a binder and a book of 5 column accounting paper. Each non-monthly expense (ie. expense that occurs but isn’t a regular monthly expense like the mortgage or telephone bill) has its own page in the binder. On that page, I keep track of deposits to that expense, any withdrawals to pay that expense and I even have columns to indicate if the expense was paid by credit card and if it is paid or outstanding. It does take a little work to figure out the monthly amounts for each expense and to set up the binder but once you are done, you won’t believe the peace of mind it gives you!
November 19, 2009 at 11:43 am
@ Alicia,
After I posted my message, I saw yours and thought maybe my list of infrequent purchases (we call them subaccounts of our “Freedom Account”) would help you.
Charity – put $ aside monthly to give yearly (saves charity bookkeeping costs)
Christmas – includes gifts, food, decorations
Clothing – have an account for each family member
Dental
Family Gifts – birthdays, anniversary, new baby
Gifts – kids birthdays, weddings, teachers
Graduation – when kids reach grade 9 I start saving…can’t believe how expensive a Prom dress is!
Haircuts
Holiday/Travel
Home Maintenance
Insurance & Taxes – vehicles, home, property taxes, property utilities
Kids Activities
Mail – we live far from family and mail most gifts
Medical
Pets
School – kids are always needing supplies and fees
Special Occasions – Halloween (costumes, candy), Easter, Valentines, Hosting Birthday Parties for family members
Splurge Account – each family member has their own
Vehicle Maintenance
These are expenses that we found unexpectedly but regularly popped up. Hope the ideas helped you.
November 19, 2009 at 11:57 am
Hi ID,
For Travel Points non restrictive my brother loves the TD Travel Visa
http://www.tdcanadatrust.com/tdvisa/travel_cards.jsp
For People that don’t care about travel I like the MBNA Smart Cash Card
3% cash back for Groceries and Gas.(Bonus you can buy gift cards their also for the first 6 months 5% back. (note: 1% on all other purchases and the interest rate is high so pay it off every month)
http://www.mbna.ca/smartcash_cardList.html
Go to readflagdeals.com or other sites for other discussions about points comparisons of cards.
November 19, 2009 at 12:18 pm
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November 19, 2009 at 12:28 pm
Being a small business owner I have to be at the bank a few times a month anyways so I pretty much pay all my bills in those times that I am already going there.
I really don’t like having alot of things automatically coming out of my account.. I’m kind of a control freak that way lol…
Having said that I have my mortgage, insurances, TFSA, RRSP, RESP all coming out automatically. Otherwise, I’m paying them myself at the bank which doesn’t feel like a chore at all and I’m never, ever late.
I think, whatever works for you is good.. so long as it’s working.
November 19, 2009 at 12:37 pm
I don’t have anything automated anymore now that OSAP payments are complete. It’s tricky to have things automated when you have a variable income.
I love the idea of paying things on your credit card (earning points) and then only making one transaction through the bank.
November 19, 2009 at 12:38 pm
The new site looks great Gail! I will only automate things that are within my control – savings, mortgage payments. My experience with automating is that banks and “the government” are pretty good with automatic payments. If there’s a problem they’ll fix it. Utility companies take advantage of people. If a utility company overbills you, good luck getting it back! They count on people :
1. Not noticeing or
2. Giving up trying to get the money back.
A major cell phone provider “accidently” withdrew over $1300 from my account due to an accounting error on their part. For 4 months I tried desperately to get them to give the money back. Finally I filed a lawsuit. It was me against their six big-time lawyers. I have no idea how they thought they would win that one in court. Their expensive lawyers finally figured out they were going to lose and returned my money, interest, court fees and damages 7 minutes before our scheduled trial.
November 19, 2009 at 1:03 pm
While I have recently automated my gas and hydro bill I have control over whether it continues or not. The money is transferred to a non ATM accessible account where they take their money from. So in the event that they get greedy I can close the account and not have to deal with telling everyone and their brother about a change in accounts (ie; payroll, Gov’t deposits, RRSP/RESP auto withdrawl, etc).
When a bill comes in I love to use the “posted” option available with online banking. I have yet to have a problem with a future payment being made. I know that it has been “paid” but I don’t have to remember when the due date is because I have already dealt with it when the invoice came in.
Another nice feature is that with auto bill withdrawl I don’t have to figure out how many days ahead of the due date that I have to forward the funds via online banking to ensure that I don’t have a late payment.
November 19, 2009 at 1:19 pm
I didn’t even realize I could put my utilities on my credit card as an autopay! I will have to look into that.
My yearly expenses are mostly my land taxes, house/vehicle/life insurance and some annual charitable contributions. I forgot about the sports fees, so I am tracking them this year to be ready for them next year. Ditto for Christmas shopping. Also next year I will have to add a ’summer holidays’ expense – I was shocked at how much money we go through during the summer. It is very much a feeling of freedom in that when those bills are due – you have the money!
We do autopay for RRSP, RESP, TFSA, mortgage, and an emergency fund.
November 19, 2009 at 1:21 pm
oh, and I still use a teller to convert all my $20’s from the ATM into smaller bills for my jars
November 19, 2009 at 1:31 pm
Alicia:
You may want to look into getting rims next time for you winter tires. I do not pay for the switch over (and do not risk the rubber when they swap the rims). If stuck, you could change the tires yourself if they are on rims. I get the tires swapped when I get the oil changed.
Irregular expenses:
I have a yearly table where I list those expenses. Then I have a yearly table of expenses. In that last table, some amounts are the same each month, and others vary. I make expenses add up so I don’t go over during the month. If one month has vet fees, there is no allocation to something else (like clothing or books…).
I’ll admit that I forgot about dog licenses this year, but I can manage that. I added a new line to my list of irregular expenses (and I’ll know why I put a specific amount in my yearly expenses next time).
I do automatically put aside a specific amount each month for car maintenance. If it does not get used up, it will be part of my downpayment for my next car. I like that car account separate from my EF.
To add to Northern BC mom’s list:
Club membership (hobbies and professional)
Gardening
Personal insurance
Tuition and book fees (part-timer)
November 19, 2009 at 1:32 pm
I have some things automated – mtg, car and life insurance, newspaper, cable, hydro and gas but I still pay phone bills and some others at the bank. I go to the bank every week since it is at the end of my street. I take out the money I require, pay any bills that are due and don’t ever worry about late fees. I often have small amounts of money to deposit in savings and I hate depositing through instant teller machines. I just recently went on line with the two banks I deal with so I can monitor my accounts (saving the need to reconcile chequing account statements each month and I do transfer between accounts but that’s about all). I recently heard a rumor that one of the banks I deal with in my immediate neighbourhood may be closing and combining with a branch down town making it necessary to drive to do my banking. This makes me livid. They need to be embracing neighbourhoods and not creating mega banking institutions that are unaccessible. I firmly believe that one of the reasons my 20 something kids and their friends have a harder time managing their money is that they do not handle it. They use debit, bank machines and credit and I don’t think it makes it as real for them. There must be a happy medium between the automation and ability to physically deal with your finances to appease both mindsets. I fear that banks with tellers are going to become a thing of the past. I like handling my money. If there’s a problem I have a person right there to deal with instead of getting caught in voice mail h*ll.
November 19, 2009 at 1:38 pm
Check out this site for info on various reward cards and programs in Canada, you will also find a nice comparison of all the major reward cards.
http://www.rewardscanada.ca/cccompare.html
November 19, 2009 at 2:57 pm
Right now only my emergency fund savings, rent, car insurance and car payments are automated. As for the gas, hydro, cable, etc. – I like to pay those myself. Like a few others here, I am a hands on type of girl and like to do things myself.
November 19, 2009 at 2:59 pm
Awesome link Tyrone… thanks!
November 19, 2009 at 3:03 pm
I brush my teeth because they feel yucky if I don’t. Honestly it’s a chore, and not a habit, but I do it because I like the results more than anything. (Kind of like paying bills!)
Call me a control freak, but I can’t stand the thought of my bill being paid without me thoroughly looking over it first. The do screw up occassionally. I pay them online as soon as I get them with the date of payment 3-5 days before the due date.
Liek Gail, I do love the points on my MC CC, but I use it for almost all my variable spending like gas and groceries. And pay it off in full every month — it’s a free loan with cash back! By having all the variable spending come in one bill, it can really highlight the months that are more than usual… back-to-school or christmas shopping. Good thing we plan for those things, right?!
November 19, 2009 at 3:04 pm
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November 19, 2009 at 4:32 pm
Glad to hear I’m not the only one who likes to be in control of paying the bills. I do have 5 automated payments come off our account, but, I control the other 7. I know when they are due and pay them accordingly. I quickly check my account daily and go from there.
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I think brushing your teeth has to become a habit. Sure, who wants to go around with bad breath and yucky teeth. However, it is a MONEY SAVER if you make it a habit to brush morning and night for TWO minutes and floss BOTH times. Our checkups have been awesome for several years because of this…..so take the time
November 19, 2009 at 6:40 pm
[...] David Bach made a career out of one idea — automate your finances. Gail agrees and says that automating your finances will make your life easier and free up time for other pursuits. [...]
November 19, 2009 at 7:12 pm
We make automatic deposits into ING savings accounts. And when I was working I also had automatic paycheque deductions for my RRSP and my charitable giving. The RRSP was especially great, because they deducted pre-tax dollars, so the amount of my pay didn’t go down that much and I wasn’t over-paying income tax.
I also write post-dated cheques for my daughter’s daycare and my church donations. It’s not exactly automatic, but it does save me having to think about it each month. I sit down and write them all up once, and then I’m good for the year.
November 19, 2009 at 8:08 pm
I’m a hybrid – most things on auto-pilot – except CC which I pay online – like having the control and paying as close to due date to get the benefit of the “interest-free” use of their money for the longest amount of time since I pay balance in full. Property taxes (4x/yr); electric; phone/cable/internet – all auto-debited from bank account – had one issue w/ electric – withdrew funds within a 3wk period DURING peak winter months when my bills are huge (electric heating). Made a complaint and threaten to stop auto debit . . . haven’t had an issue since. Like the idea of paying everything on CC (I have pts card) but too lazeeee to do the switch over. Psychologically if I saw the outstanding balance with all these bills charged on my CC though (even though the funds are obviously there if I auto debit from bank acct) it would make me a bit uncomfortable ~ so maybe that is why I haven’t made the switch.
November 19, 2009 at 8:35 pm
Our Mortgage Payments, Car Payments, RRSP Contributions, Gym Membership, and Cable TV bills are all automated, as they are a fixed cost. I pay the water, electricity, cell phone manually as I like to see the bill before the money comes out of our account.
I’m a bookkeeper by nature (and profession), so I rather enjoy paying my bills manually. I also keep track of every cent in Quicken, and keep a running Excel budget. It’s fun!
November 19, 2009 at 9:18 pm
I used to have my savings automatically transferred to my ING accounts, but since I get paid on the 15th and last day of every month, sometimes my biweekly transfers would “bounce,” causing my auto-savings plan to cancel itself. Annoying!
Now that I’m trying to get myself out of debt, I really enjoy moving the money around myself. I’m actually a little obsessed about planning where the money is going and seeing the balances go up (in savings) and down (in debt), haha.
Now, the only things that are automatically deducted are my car insurance, RRSP, LOC payment, and bank fees. I got them all moved to the day after my paydays (1st and 16th) so that the money is always there and I know exactly when it’s coming out.
November 19, 2009 at 10:17 pm
I have autopay for mortgage and car (same reason as other poster – no choice) and I have automatic transfer for my RRSP and savings but after a couple of bad experiences where I was billed the wrong amounts or had taken out after the account/service was closed or canceled I decided not to ever do it again. In some cases it took months and countless letters and time on the phone to get the situation corrected. If you use autopay be diligent about checking your statements to make sure they are error free.
November 19, 2009 at 11:07 pm
100% of my transactions are automated:
Internet, cell phone, gym membership, long distance, etc. automatically charge my credit card, and I get 1% cash back.
Credit cards automatically pull the full balance payment from my HELOC (which always has a credit balance so I never pay interest).
All of my insurances, condo fees, electricity, property taxes, emergency fund, planned spending, RRSPs, etc. automatically pull from my HELOC (which again, is always in credit balance so I never pay interest).
My paycheque is autodeposited onto that same HELOC to perpetually maintain the credit balance (so I never pay interest – noticing a pattern? LOL).
I could never look at my accounts, and as long as I am working and tracking my spending, everything gets paid on time 100% of the time without paying interest. LOVES IT!!
PS – my planned spending is in a high interest savings account with Ally which is nearly a 1% higher than ING – anyone else switch to them?
November 20, 2009 at 12:17 am
Life Ins, disability insurance, municipal property tax, medicare are all monthly auto payments out of my chequing acct. When I used to put money into RRSP’s that was also auto. (RRSP’s no longer seem useful to me since I’m now in the lowest tax bracket, I’d rather stick money into a TFSA.) Telephone and cable bills get paid automatically by my credit card. Everything else I like to be hands on with and I pay online. I like to stay in touch with my accounts. I set aside money regularly in an account for other yearly expenses like car insurance, water taxes, donations, house insurance etc.
I only spend, on average, about $40 a month in cash. All my other purchases I put on my one main credit card (for airmiles and to make tracking my spending simple.) I pay the credit card off in full each month. I have a second credit card which is used strictly for online purchases and not often. My car loan is on my line of credit so I like to make two pmts on it each month but when I make the pmts varies from month to month so I don’t want to set up an auto pmt for it.
November 20, 2009 at 2:52 am
I like your article it is very interesting.
November 20, 2009 at 8:35 pm
I only have one thing automated and that’s my $20 a week that goes into my ING savings account, it’s a very tiny step but $20 is better then $0 dollars.
I also pay my personal loan by direct debt but there was no choice in that, still great tho
December 4, 2009 at 8:42 pm
Your “1/12″ idea is one of my best savings tools. I was fortunate to have my dad show me this trick when I became an adult:
Set up a spreadsheet that totals your savings accounts at the top.
Next, set up a column that lists each month, and along the top row, lists each of your savings areas & how much per month you need to save for each of them.
Then, every month, update your savings accounts balances, and increase your different savings areas by the appropriate amounts. The total of your accounts and the total of all your savings areas should match (you’ll need a “slush fund” for the months when you can save more or less than you need to save). Say you want to spend $1100 every Christmas – every month add $100 to the Christmas column (and put that money in a savings account!), then in January, transfer $1100 out of your savings account to your chequing to pay off the VISA, and put a $-1100 entry in the Christmas column.
You don’t have to feel bad about spending your savings because this was your plan. Also, this is great for “borrowing” from your savings. Say you saved $2000 for new furniture, but actually spent $2500. You can borrow from other savings areas by showing your furniture saving balance as -$500, and keep increasing the other amounts as normal. Once you pay off that $-500 debt, your other savings amounts will still be where they should have been.
Don’t forget columns for emergency cash, vehicle insurance deposit, property taxes (if you pay those directly), RRSP savings, etc.
April 27, 2010 at 12:31 pm
Hi there. What do you think about California’s insurance laws?
May 29, 2010 at 1:34 pm
I do not see a fast solution. But I hope there is one!