at the cinema with the children rather than sitting at the kitchen table with
your calculator trying to balance your cheque book? Well, if you didn’t,
the following are three great (free!) ways in which to automate your payments
and make your life so much easier:

The Standing Order

All creditors now allow you to make a monthly standing order payment to repay
their debt. In fact, most creditors prefer this method as they’re fairly
sure they’ll get their money on time (although it is not a guaranteed form
of payment - standing orders, like cheques, can “bounce”).

The upsides of a standing order repayment scheme are: (i) you know the payment
will be made on time (thereby avoiding any late payment fees); (ii) the monthly
amount is fixed, so its easy to budget for; (iii) after a while you don’t
notice the money going out of your account, so when you’ve finished repaying
the debt, just transfer the standing order to your savings account.

Although payments via standing order doesn’t mean that you reduce the number
of creditors that you have, your bank should let you set up as many standing orders
as you want (provided you have the money to pay for them). Doing this will make
the day-to-day running of your account(s) so much easier.

The Direct Debit

The direct debit is the payment method of choice for creditors. As with the standing
order, the direct debit is an automated payment from your bank account. However,
unlike the standing order, a direct debit is not really for a fixed amount each
month (although, in most cases, practically speaking, the amount is fixed at the
same sum). Instead, a direct debt mandate (the authorisation you give to your
creditor to take money out of your account) says that the creditor can take as
much as they want. For this reason, you should be careful before giving a creditor
a direct debit mandate - make sure both of you (i) know the day the money
is going to come out of your account; and (ii) as much as possible, know the amount
to come out of your account.

Not really ideal for all payments, the direct debit is, however, really useful
for utilities bills. Just keep in mind that with the standing order you are the
one sending the money to your creditor, whereas with the direct debit your creditor
is asking your bank to pay them (so it’s a little like giving someone a blank
cheque!).

Online Banking

Becoming very popular is to open an account with a bank that lets you do all your
banking and bill payments via the internet. Internet banking is a great way to
stay ahead of your bill payments and finances without having to leave the comfort
of your home or office. Having said that, do make sure that you check to see if
your bank is going to charge you for processing transactions via the Internet
- as some do - before going ahead and doing it.

And finally…

As you can see, if you give some thought to automating your finances you could
find that you have lots of spare time to spend doing more enjoyable things -
like a night out with the family!

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