Today’s my last day of work before I take some long-needed Long Service Leave. My family and I are going to London for almost exactly 100 days. My wife will be studying patisserie at Le Cordon Bleu and I will be looking after the kids. I’m really looking forward to the break, and to spending some more time with the boys, but it means that for the next couple of months this blog is probably more likely to be filled with London anecdotes than technology news, although there should be an Apple event at some point while we are away that I will likely blog about.
Steve Jobs (seems appropriate to post this the day after a big WWDC announcement!)
I was browsing the web when I stumbled upon this article, which is from a website called Get Rich Slowly. In it, the author talks at length about the pro’s and con’s of autopay as a method to pay your bills. I pretty much agree with everything that it says, which in summary is that autopay is great because you don’t forget bills, but a problem because you are giving everyone access to your account. It also made me think about my own experience, which has evolved to having the technology work for me quite well. Let me tell you about it….
For quite a number of years, I was hopeless at paying bills. I would often gets calls from the call centre about a missed bill or a missed payment, so much so that I was starting to expect them! Because I often waited until I got paid, the bill would end up in a drawer somewhere totally unpaid and it was costing me a fortune in late fees and driving me mad.
I used various systems to help me remember, corkboards for bills, reminders in my phone but some bills would always slip through the cracks.
Anyway, eventually I discovered autopay. It was great, no more reminders to set, corkboards to use, it just worked automatically, and most of the time I could line it up with my pay and just forget about it.
Problem was, it didn’t always work the way I wanted. The first problem I encountered was that if something odd happened with my pay, all of a sudden all my autopays didn’t work. One time, work missed paying us by a day and I ended up with hundreds of dollars in fees from the bank dishonoring the payment. The other was that sometimes the institutions would come and take the money at the wrong time or in the wrong amount. I would walk up to a shop and try and send my card and discover that my bill that month was bigger or some company had decided to take an extra payment and all of a sudden I didn’t have any money to pay for lunch.
So, I decided to put a stop to all the autopayments before I got even more fees. But what to replace it with?
That’s when I noticed that pretty much ALL my bills had a BPay number on them. In Australia, BPay is a pretty standard system where you can pay money directly out of your bank account to a company that sends you a bill. The important thing about BPay is that they don’t have access to your account, you have to initiate the transfer to make the money change hands. Some further investigation revealed that not only did my bank allow BPay, but they even allowed me to schedule it! An idea was forming.
I went through all my bills and worked out a rough fortnightly payment for each one. For bills like electricity, I divided by 13 weeks for the quarter, for bills like my mobile phone I took the minimum monthly amount and divided by two. I then went through Internet banking and set up payments for all the bills to come out straight after I got paid each fortnight.
It worked like a charm!
I discovered that pretty much everybody will keep track of your BPay payments in their system and credit them towards future bills. So, the phone company remembers you made a payment in the middle of the month and applies a credit to the value left when they send the bill. Assuming I don’t go over my call and data cap limits, it just pays itself automatically every month and I don’t need to do anything. If I do go over, then I can see it when I get the bill ($150 due in two weeks and I know only one more $70 payment will go out between now and then) and set up a once-off scheduled payment or an adhoc payment for the difference.
Of course, for some services this means that sometimes I get ahead. For instance, I am essentially paying my mobile phone bill fortnightly and it’s a monthly bill, so I am making a month more payments than I need across the course of a year, but again this is easy to spot and it’s really easy to adjust the schedule in my Internet banking to skip a payment. Sometimes it just works out because I spend too much one month and the overpayment balances it out.
By the time we got our home loan this system was working so well for us that when they had BPay as a payment option, there was basically no choice. Now we pay our home loan ourselves every fortnight and it gives me total control to pay more if I want, or to skip a payment if we are getting ahead (and I want the money for something else). I can even set up a once-off schedule payment to take the money we skip and funnel it into a savings account so I don’t spend it!
Overall, it’s a great way to work the autopayment mechanism but keep control of your own money. I’m so happy with it that when we go to London later this year for my Long Service Leave I think i will just leave it in place to continue to collect my pay and pay the bills, transferring whatever is left over into a UK bank account for us to spend.
I think this is a great example of technology enabling a better life for us. I don’t know what I would do without technology in this instance, probably just continue to pay late fees on bills or overuse my corkboard! But since it’s here, I recommend everyone give it a go.