Tuesday, February 23, 2010

Three Strikes

Three times in the last two months I have failed to pay a bill. I'm not sure what is going on with my bill paying system except that I've narrowed down the problem to - me.

Each month, I create a monthly spending plan which is based both on our yearly spending plan and the prior month's spending plan. Not much changes from month to month except the normal fluctuation up and down of our bills and the occasional appearance of a quarterly, semi-annual or annual bill. Then comes the first and/or the fifteenth of the month and I pay our bills, I cross them off the spending plan, I enter them in our check registrar, I deduct the amounts from our various accounts and I actually pay our bills, most of them, via on-line bill pay.

Looking back on the last two missed bills, I see that I crossed the bills off on our spending plan, I entered them in our check registrar, I deducted these monies from our total, etc. But, what was missing was the actual bill pay. I can't recall whether I missed the on-line step in total or whether I entered the bills into the on-line system but failed to hit that last button.

So, I've got to rethink my system and add in a final double checking step to make sure that the on-line payments are reflected in my pending payments at the end of the process.

What is your system, does it work for you, have you ever had this type of failure?


Jeff said...

Sam, that's frustrating. I've got all of my bill setup to be direct debited from my checking account or bill to a credit card. The only bill I have to physically deal with is paying the credit card off each month. I do this online through the bill pay feature at my bank.

Sam said...

Jeff, You are correct that auto-debit would likely solve this problem.

But, I had one bad experience with auto-debit in the past (once you give a payee permission to come in and take money it can, sometimes, be hard to revoke that permission or correct an error) such that the only payee who has permission to auto-debit is the bank that holds the mortgage on our primary account which is also the bank where we keep our accounts.

Anonymous said...

Weird. This is exactly what's happened to me. Three mistakes in the past 2 months -- thought I paid, but didn't.

I think I'm going to switch to auto-pay as well. My worry is that I'll get lazier about checking the bills thoroughly since it's "taken care of." But making these mistakes shook me up a bit. I'm nowhere near getting senile, not sure what happened!

Not My Mother said...

Yes, I've had that happen often. I'm quite disorganised and things get lost on my desk really easily.

Now what I try to do is keep the bills separate to general paperwork, even if it's out on the kitchen counter. Even better, I try to immediately log on to my internet banking and set up the future payment to pay it from the account on the business day before it's due. Then it doesn't matter so much if I don't reconcile my budget straight away, at least the payment has gone out.

This only works because we have internet banking which allows you to set up future payments (and clears by next business day, otherwise it'd have to be 3 days before). And I keep enough cash in the account that there's a buffer so I don't need to worry about that future payment making me overdrawn.

(I also write "paid via bpay" and the date on the bill when I've done this so I don't accidentally set it up twice.)

frugalcoconut said...

I have everything possible auto-debited to a rewards credit card which earns me cash back, eases my cash flow, and reduces liability by creating a protective barrier from my checking account which provides for dispute resolution in the case of erroneous charges being incurred. For my two other rewards credit cards, one is solely for groceries/fuel and the other is for any miscellaneous purchases. I find that this three-way usage separation facilitates spending pattern analysis and provides a buffer whereby my auto-debit card is safe even if one of the other two cards is compromised. All my CC's are set to auto-pay the full balance around the 1st of every month and I have plenty of time to plan for it using CalendarBudget (http://www.calendarbudget.com). For items that cannot be auto-debited to the CC, I have them auto-drafted from my checking account. I always set up the auto-debit through each company's site directly (never through the bank) without issues ... I find it's actually better that way because there's no chance of manual errors on my part, especially for items that can fluctuate annually/monthly.

Sam said...

All good ideas.

FG, we don't use credit cards (except for travel) but if I were to do auto-debit, I like your idea of having the auto-debit buffer.

NMM, my problem is not a lack of organization, I've got a monthly spending plan that tracks my bill payments, I enter them into the specific check registrar and I write on the bill "paid by e-pay and the date."

Somehow, I think I'm missing a step in the on-line payment process, failing to hit the confirm button or something.