How to Auto Pay Bills Online and Drastically Simplify Your Life

Nobody likes paying bills. They’re tedious, expensive, and often fall at inconvenient times of the month. I can’t even begin to count how many times I’ve tucked myself into bed and then thought “Wait, was the cable bill due today?That was all before I made one of the best financial moves ever: learning how to auto pay bills online.

First – Why You Should Auto Pay Bills Online

I used to pay my bills the old fashioned way – I’d sit down every month, write out individual checks for each bill, and have to remember to mail the envelope or get charged with late fees. This was a simpler time….or so I thought. Now that I’ve got auto-billing set up, I can safely say that it is the easiest part of my financial routine.

It’s so easy to set and forget it, plus I never have to worry about missing a payment! Some like to manually make sure the money leaves the account and that everything is paid on time, but honestly, with running my own business, I like having one less (or in this case 20 or so since that's how many bills I have) thing to cross off my monthly to – do list. 

How to Auto Pay Bills Online and Drastically Simplify Your Life in Three Steps

First, Calculate Your Expenses

Your first step should be to figure out what you’re usually spending each month on bills. This should be super easy if you’re keeping a budget – or using an automated tool like Learnvest, but if not, just write down your monthly recurring bill payments, the ones you pay every month like clockwork (rent, utilities, car payment) and total them up. Use the Financial Best Life free budgeting template if you'd like a jumping off point.

Grab our free budgeting spreadsheets. Click here to subscribe for access to the best life vault and nab access to six other worksheets while you’re in there!

Second, Open a Separate “Bill Pay” Account

Then transfer this set amount either once a month or bi-weekly into a separate account plus a little extra just in case of emergency. This is called a “money cushion” instead of a formal emergency fund. Read about the difference between these two here. 

FYI: I keep about $200 in my separate bill pay account for any unexpected overages.

I've long touted separating out my bank accounts: one for bill pay and one for spending, as one of the best financial moves I've ever made.

Third, Set Aside A Chunk of Time For Sign Up

I’m not going to lie, setting up auto-pay is a little time-consuming on the front end. This is mostly just because you have to sign up for online services with your utility providers (and any other monthly payments you make.)

Set aside a few hours on a Saturday or “off” day to get everything set up. Most companies will allow you to set up auto-drafting from your bank account directly, or you can set up automatic payments through your online banking portal as well.

Pro Tip: This is also the perfect time to do a bill audit and see where you can cut expenses. Read how to do this here. 

Fourth, Automate Everything and Turn it All “On”

Once I got everything set up….. I decided to automate a few more things. I set up a monthly automatic transfer from my main checking account to my new bill pay account, and a similar transfer to my savings each month.

Related: 8 Ways to Quickly Build Up Savings

Learning how to auto pay bills has greatly improved my financial habits. I’m no longer missing payments or worrying about due dates, and my savings are growing without me even having to think about it. I think it’s a great way for beginners to take control of their finances in a worry-free way. 

Have you automated your bill pay? Tell us about it in the comments!

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Want to really take control of your budget and monthly habits? Learn how to auto pay bills online and never miss a due date!

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  • The Wallet Doctor
    May 25, 2014 at 9:09 pm

    I’ve always been nervous about setting up automatic bill pay. I feel more confidence that things are successfully getting paid when I am actually doing the clicking myself. Maybe that’s old fashioned, but that automation just makes me nervous!

    • Lauren Bowling
      May 26, 2014 at 9:01 pm

      Not going to lie, the issues I’ve had with a vendor getting automated bill pay set up make me see your perspective. Still, it has simplified my life drastically.

  • Naomi
    May 24, 2014 at 10:04 pm

    Great article! Personally, I’m still on the fence about signing up for auto bill pay! I still like the idea of actually paying my bills and not having them “pay themselves”! Who know though it may grow on me in the future! 🙂

    • Lauren Bowling
      May 26, 2014 at 9:01 pm

      I used to feel this way too, and then my life got significantly busier. maybe someday I’ll go back to paying everything by hand. It’s all about finding what works best for you!

  • Alexis S.
    May 22, 2014 at 8:19 pm

    Lauren, your “reverse” budgeting method reminded me of my mom’s. 😀 That’s exactly how she used to budget her money! My sister is more of the “Excel” type – she uses Excel to keep track of income and bills. I’ve tried both sadly, I am not doing very well in it seeing as I still end up overspending. I think I might try setting up a separate savings account though, and of course, automate paying my bills. 😀

    • Lauren Bowling
      May 23, 2014 at 1:08 pm

      Separate savings was my thinking too. Some of my friends who had trouble with overspending found great success with using an “all cash” budget. I’ve toyed with trying it too (I’ve been known to overspend as well!) but am working up the courage. Perhaps we can do it together?

  • J. Money
    May 22, 2014 at 11:35 am

    Way to go! And sometimes (most times?) you can actually get the dates changed for the deductions by just calling them up and asking 🙂 Give it a try! Might take you a while to do all of them, but then it really would be perfect for you!

    • Lauren Bowling
      May 22, 2014 at 2:02 pm

      Ah! I will have to do that. Thanks for the hack, J. Money 🙂

  • Andy@artofbeingcheap
    May 22, 2014 at 3:06 am

    I do this and I love it. It takes a lot of stress out of life not having to worry about bills. When a bill comes I take a quick glance to make sure nothing looks off then it goes straight to the shredder never to be thought of again. The day I got 100% of my bills automated was a great day indeed.

    • Lauren Bowling
      May 22, 2014 at 2:02 pm

      Yeah, I look forward to getting more comfortable with the process as the days go on. 🙂

  • Retired By 40!
    May 22, 2014 at 1:06 am

    I love the tip about the $300 cushion! We have had that stupid double billing thing happen to use before too, and it sucks when you run your checking account pretty close to zero all of the time (by choice, not necessity 🙂

    • Lauren Bowling
      May 22, 2014 at 1:59 pm

      Thanks! It was painful taking it out of my emergency fund, but at the end of the day it was money well spent.

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