Debt Management Tip: Take Advantage Of Automatic Withdrawal

Automatic withdrawal can be a powerful tool to help you pay off bills and get your savings on track.

Sending bills off every month is a horrible chore. Every time that you have to sit down, sort through your pile of bills, pull out the checkbook, match up the envelopes with the bills, write out checks, go to the post office…it’s boring, time-consuming, and frankly, not that efficient.

Just about every company these days will allow you to pay by automatic withdrawal. This is a service that most banks will do for you for free.

You need to know the date, and the amount, of every bill that will be withdrawn from your account. If money is really tight, you may want to limit this service to bills that are a fixed amount every month.

Your utility bill will usually fluctuate every month for instance. But your car payment, rent, mortgage, and credit card bills generally are the same.

Remember if you can afford to, to pay at least a  little more than the minimum on your credit card bills every month.

Many banks will actually mail out checks for you. Find out if your bank will do this for you and what the charge is. If it’s only a few dollars extra month – by all means do it! The time and stress it will save you are worth it.

Now that you’ve got all of your bills on automatic withdrawal, do the same for your savings. Put money in a savings account, in a 401k if your company offers one, in a college account for your children…if you withdraw a little bit every month, and put it in an interest bearing account, you’ll be thrilled with how it adds up over time.

Why should you put your savings on automatic pilot? Because if you don’t, you will ALWAYS find something else to spend the money on.

If you put your savings and bill paying on automatic, you will find it much easier and less stressful to get out of debt.