Frugal Tip: Pay your bills online

If you’re like me, you bank at a credit union or bank that offers you “free bill pay” so long as you have a checking account, savings account, and direct deposit (if not, why don’t you switch?!).

If you’re like me, you have bills that you have to pay. These bills may be utility bills, regular religious donations, and debt payments (car loans, credit cards, mortgage, etc.).

For this example we’ll assume that you have 15 bills that you pay each month. We’ll assume that for each of these you receive a paper statement and a return envelope (in other words, we won’t factor the cost of you supplying envelopes into this tip).

Presently, the cost of a first-class postage stamp is USD$0.44 (which is a fancy way to say 44 cents).

Now for the math…

15 payments times 44 cents is $6.60 per month. Multiply that by 12 months and you get $79.20.

If you use your credit union’s or bank’s free online bill pay to pay these bills rather than writing checks and stuffing them in an envelope you’re going to save $79.20 per year!

What if your bank doesn’t have free bill pay?

Isn’t that reason enough to switch? Even if they don’t, and you can’t or don’t want to switch, most utilities and lenders have an option for them to directly withdraw funds from your bank account, thus saving you the stamps as well (but giving them the control over when your bills are paid – including any potential snowball that you would have paid).

Savings

Any way you look at it, by saving that extra $80 per year is always a good thing!

Tune in for our next Frugal Tip! You can thank me later™.