How to Streamline and Save Money with Automated Payments
As an independent contractor, self-employed worker, or gig worker, you know that staying on top of your finances is essential to ensuring that bills aren’t forgotten, or late payments aren’t made. Late payments can put you in debt and ruin your credit score. A bad credit score can prevent you from getting approved for loans, credit cards, a house, or a car. Day 3 of the Money Saving March challenge brings us to automated payments and how you can use them to streamline your bills and save money too.
What is an Automated Payment?
An automated payment is a secure payment method where funds are withdrawn directly from your bank account or debit/credit card at a predetermined date each month. It is a convenient way to pay bills without having to log into multiple accounts, keep track of due dates, or worry about missing a payment because of the auto-payment system.
Benefits of Automated Payments
Automated payments offer convenience and security when it comes to paying bills. It eliminates the need to remember due dates since the money will be automatically deducted each month. You also won’t have to worry about late fees since the bill will be paid on time every month with no effort! And if you ever need proof of payment for any reason (like tax purposes), all your records will be easily accessible in one place instead of scattered across different accounts and paper statements.
Also, many businesses offer discounts to customers who sign up for automatic payments. That means more money saved in the long run!
Late payments can have a detrimental effect on your financial status and life in general. So if you don’t set up automated payments and then happen to miss a payment, you’d not only be dealing with the late fees, but your credit score could be negatively impacted. The lower your credit score, the less likely you are to get approved for credit cards and loans, and the higher your interest rates. Thus putting you in a tricky situation where you will spend much more money than others with a lower credit score. Nerdwallet said, “the lifetime cost of higher interest rates from bad or mediocre credit can exceed six figures.”
How To Set Up Automated Payments
The process for setting up automated payments varies depending on what service provider you use. Still, most of the time all you have to do is log in to an online portal and give your bank account number and routing number. You may also need to provide a valid email address so that they can send confirmation emails when payments are processed successfully. Once everything is set up correctly, all you have to do is sit back and relax, knowing that your payments are taken care of!
Automated payments make managing bills easier and less stressful while helping you save money at the same time! Setting them up is easy—just follow your service provider’s steps and ensure all the information is correct before sending it. Then sit back, knowing your bills are paid each month without extra effort! Take advantage of this valuable tool today so that you don’t have any surprises come tax time!
As we continue with our Money Saving March challenge, it’s essential to keep your eyes on the prize and attempt to apply each daily topic. The financial independence journey sounds easier said than done, but each day should help you move forward if you apply these common financial literacy practices, and automated payments can help. In case you missed it, check out Day 1 and Day 2 of the challenge, and then head to the blog for even more content!