The savings is not only in units of time. You also save money by operating this way. You’ll never pay interest, late charges or finance fees. You’ll earn credit card rewards that you can cash in later. Sometimes, companies even offer discounts for guaranteeing payment within a certain time period after the statement is issued. A coworker of mine gets a 5% discount on his gas bill if he pays it within the first week of receiving the statement.
The only thing left to worry about is maintaining enough of a balance in the checking account to cover all of those bills. Easy. Take a look at your last year’s worth of expenditures. It’s pretty clear there is a pattern. In fact, a lot of your expenses are completely fixed, or pretty near the same amount every month. Even what you spend on credit cards each month is usually pretty standard from month to month. For our family, our monthly income is fixed too (for some this may be more challenging), so we know what we have to work with. When you set bills up for auto-pay you can dictate when they get paid. You can synchronize them all to one date, or stagger them to be paid two or more times in the month. You now know how much is coming in and when, and how much (give or take) is going out, and when. We build in a healthy cushion to keep things rolling smoothly. We make sure we maintain a certain balance in our checking account that our bills will never exceed at any given time. The rest, we have set to (automatically, of course) transfer into Savings. Cha-ching – in both time and money!
And if you’re worried about missing fraudulent charges because you’re not looking at your bill every month (not likely unless you lose a credit card or have a neighbor siphoning your electricity), you can take a look at your bills every month anyway. But you don’t need to do a thing. It’s all set to auto-pilot.
Take a look back at what you’ve just done. You’ve effectively reduced the time spent on finances from at least 12 days a year (and almost certainly much more than that) to ONE DAY A YEAR. And you saved money in the process, by reducing late charges and interest, earning credit card rewards, and receiving discounts for early/on-time payments.
As CEO of your household, how can you turn that down?