I don’t pay my bills.

That is, I don’t think about paying my bills — my autopilot bill payment system does it all for me!

Here’s how it works:

1. Figure out how much gets paid every month on bills.

I made a simple list of the bills I deal with every month and how much I pay for each. It looks like this:
Car loan $X
Utilities $X
Cellphone $X
Internet $X
and so forth.

Most of these bills have a standard cost, like cable fees and association dues. For the rest, I put in a typical cost by averaging my old statements.

I took the total cost of all those bills and divided it in half. This is my biweekly bills amount.

2. Open a separate checking account.
I opened mine in a wholly separate bank! This helped me because it makes it harder to dip into when I want to buy something I shouldn’t.

3. Direct deposit the biweekly amount from #1 every paycheck into the new checking account.

4. Setup auto-pay from the checking account for all the bills.

Some months, my statement will be below average, so paying a set amount every month gives me credit on my account. For instance, right now my cellphone statement shows -$3.00. They owe me money. That credit could be used to cover the times I go over.

When I do go over and there’s no enough credit on my account, it gets billed to me on my monthly statement. I then handle that manually.

But if I am under my budget every month and I autopay the same amount, that credit could very well add up over time. Just last Friday, I received a nice surprise refund check from my car insurance provider! Woot!

5. The rest of my paycheck goes into my normal checking account.

The results are:
1. I never have to worry about paying the bills. Never pay late fees again. It’s all automatic!

2. I feel no pain. With this method, I’m not spending any more money than I do normally. I’m just taking care of business on auto pilot.

3. I’m less likely to overspend. Because all the bills are handled elsewhere, looking at my normal checking account gives me a more accurate picture of how much I have.

4. I can prepare for large payments. It’s like a personal escrow account. For example, the biannual property tax bills are huge! I added up the tax bills for a year and divided the total by 12. That amount is included in my monthly Bills List. It goes into my checking account like everything else. Then when the tax bill comes around, I have the cash ready to go.

Sure, it hurt at first to reduce my spending money every month this way. But taxes are something I have to pay eventually. It’s better to spread it out over the year than deal with one massive financial hit unexpectedly.

I can do the same process to easily save up for large purchases (like a vacation) in the future.

5. Secret savings! During 3-paycheck months, I still have direct deposits into my bills-only checking account, even though the bills for that month have already been paid. My spending money increases as usual, but I’m also building a small reserve on the side.

Best of all, it’s flexible! You don’t have to do this for ALL your bills. Even if you start with a few ones, it’ll definitely make your life easier.