Finding the Best Way to Pay

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Electronic and Automatic Bill-Paying
If you're considering paying your bills in ways other than the old write-a-check-and-mail-it routine, it's important to know the difference between electronic bill-paying and automatic bill-paying.

Many companies now allow customers to pay their bills online or by phone via electronic funds transfer. This can mean using a credit card (you're probably used to that) or authorizing a debit from your checking account (a somewhat newer phenomenon). Many banks offer online bill-paying services, so you never have to write a check again. The distinction to understand with any electronic transaction is whether you are sending the money or the payee is coming into your account and taking it. If you use a bank's bill-paying service, even if you authorize recurring payments to the same payee, each payment is issued by the bank to the payee and you control the date the payment is sent. If, on the other hand, you sign up for automatic bill payment through a company's Web site, the company then has the authority to come into your account and take its money – and many do not remove those funds exactly when they say they will. It could be a few days earlier, which could wreak havoc with your account management if you maintain a low balance.

Sticking with Your System
By now you've heard me say over and over how important it is to make your system work for you and not the other way around. You now have the best system you could possibly build for yourself with the information you have available to you right now. If, going forward, you find that something's not working the way you had hoped, change it! Don't get caught up in blaming yourself – refine your system until it's comfortable, efficient, and effective for you.

Remember that it takes time to change behaviors. We are creatures of habit, and that can work both for and against us. Give yourself a few months to transition through that awkward stage of moving from old habits to new. Do whatever works for you to remind yourself to keep on top of money management, whether it's writing your bill-paying days on your calendar, setting an alarm in your PDA, blanketing your space with sticky notes, or mentally attaching the task to another one that's already ingrained (for example, if you always remember to take out the trash, start paying the bills just before or after). If you keep at it, eventually your new system will become second nature.

If, despite your best efforts, you still find yourself not using the system, give some more thought to why that might be. Is it truly as refined as it could be? If you're sure that the mechanics of the system are as good as you can make them but it's still not enough, consider consulting with a professional organizer who can evaluate your system with a fresh eye. Are you forcing yourself to do something that's really not your forte? Are there emotional issues that make this difficult for you? Consider talking to a therapist who can help you work through the thoughts and feelings that might be holding you back.

Check Your Credit
Now that you're avoiding late fees and overdrafts, you should also review your credit

• Equifax – 800-685-1111 or www.equifax.com
• Experian – 888-397-3742 or www.experian.com
• TransUnion – 800-888-4213 or www.tuc.com

If you visit their Web sites, poke around until you find the free or nearly free options: You can pay extra for immediate online access, enhanced reports that provide more information or a more readable format, combination reports that give you all three agencies' data plus your credit score, and services that promise to monitor your report and alert you if anything goes awry. These services are the ones displayed most prominently on the Web sites; just be aware that you can have a no-frills, yet complete, copy of your credit report mailed to you for $10 or less. Under some circumstances, for example, if you have been the victim of identity theft, the fee is often waived. Check each reporting agency's Web site for details.

Also know that the credit reporting agencies will sell your contact information to mailing lists; if you don't want them to, find their opt-out procedure and complete it.

If you do find an error or evidence of fraudulent activity in one of your reports, call the agency or go back to its Web site for instructions on what to do next.