I’m sure many people can relate to the quote “Too much month, not enough money“. Being short of money in the family monthly budget happens to all of us on occasion due to unforeseen expenses or dare I say over spending. When over spending effects mortgage, auto and other monthly payment obligations however it becomes a serious matter. Late or missed payments are the main cause of lowered credit scores which can haunt a person for their whole life.
One solution to over spending and to make sure monthly obligations are met is to go on an auto bill-pay plan that matches when a person gets their pay check. The vast majority of W2 workers today are paid every 14 days or bi-weekly rather than twice a month or monthly which is even more rare. With employers automatically transferring a high percentage of employees pay checks into their checking accounts today, doesn’t it also make sense to have a mortgage half-payment debited out of their accounts a day or two after they are paid to make sure this important obligation is met before any other spending takes place?
If this method is followed month after month and year after year, not only will a person be able to stay current on their monthly payments but there are many addtional benefits.
Here are some of them:
- Smaller half-payments pegged to pay days make it easier to budget household expenses.
- Bi-Weekly payments mean 26 pay periods per year or two extra half-payments that can be applied against the principal balance of loans. A $200,000 mortgage at 5% interest can be paid off 5 to 6 years sooner saving $40,000 to $50,000 of interest.
- Having the peace of mind in knowing monthly payments will always be made and made on time.
- Having the convenience and safety of ACH debits which are much safer and less hassle than dealing with mail, stamps & envelopes.
Auto Bill-Pay programs like this require very special system of handling funds that almost all banking institutions do not offer with their normal bank services. They will most likely refer you to an outsourced partner or third party that will set up a half-payment debit system for you. There may be some fees and a recurring debit charge but for more and more people today the results and convenience are worth it.
American consumers are starting to realize that the best ROI is to pay off debt with their discretionary income. 




