Online Bill Pay, Explained
Generally, that means you'll have access to all your billing and payment information via your phone. Compared to wire transfers, digital payments offer greater security and more options in the event of fraudulent activity. But what is bill pay service, and how does it work?
How does bill pay work?
Banks commonly have a section within their digital portals for online bill pay. This online bill pay service is primarily designed to accommodate recurring payments, but it can often be used for one-time payments. Customers can use this option to set up digital bill payments for many service and product providers, from electricity bills to streaming services.
How to pay bills online
Wondering how to set up bill pay? The first thing to know is that you'll need an account with a bank that offers online bill pay services. It may be called digital payments, digital billing, or similar.
Once you have an active bank account, navigate through your account options on the bank's digital portal until you find the option for online bill pay services. If you have trouble locating the option, contact your bank's customer service and have them direct you to the exact spot within your account where you can access it.
From there, it's a matter of entering bill and provider information and confirming the payment. You'll need information from your bills for this step, but since this service is within your bank account, you won't need to enter routing or account numbers.
Depending on how many subaccounts you have (checking, savings, etc.), you may have to select from those to tell the system which one the payments will be coming from. You can choose to make the payment recurring and decide how often it occurs. Once you confirm the charge, it will go into effect and activate on the specified date(s). You'll have digital records of this payment each time it's made within your account.
Financial planning
Below are money-saving tips that can help you learn how to save money. The best ways to save money vary between individuals and circumstances, but our tips are a great place to start.
Budgeting
Coming up with a weekly and monthly budget is one of the more effective strategies for managing income and saving money. The first step is to total your monthly income and write it down. Then calculate your monthly expenditures and break them into "necessity" and "optional." Subtract the monthly cost of your necessities from your monthly income. What's left is your discretionary income. While you could use this for those optional costs (like entertainment), you could also pay it towards debt, save it towards an emergency fund, or invest it.
Reduce costs
Consider reducing the number of monthly subscriptions you have, as these can add up surprisingly fast. Other options include taking fewer nights out, lowering your grocery shopping bill, and finding any other area to cut costs without significantly sacrificing your quality of life.
Pay down debt quickly
Debt tends to cost more the longer it takes to pay off. The higher the interest rate on the credit or loan, the more truth to this. As a result, paying off debt quickly can save significant money in the long run. When structuring your budget, consider paying more than the minimum payments on any debt. Doing so will speed up the repayment process and reduce how much interest you pay overall.
Investing (401k Roth IRA, permanent life insurance)
Another way to save money is to put it out of reach and make it work for you. However, traditional investment vehicles such as a 401k or Roth IRA carry some risk. These accounts are dependent on the wider market and can experience losses during market downturns. You may even consider using your tax return to purchase life insurance.
Life insurance in financial planning
Permanent life insurance plans usually include a cash option component that serves as an investment account. These investments work differently, depending on the type of permanent life insurance in question. Whole life policies, for example, often offer guaranteed growth instead of being entirely dependent on market performances. Before deciding on a policy, it's essential to consider how much life insurance you need.
If you're a business owner or self-employed, and you're asking, "can life insurance be a business expense?" the answer can be a little tricky. For the most part, life insurance is only a business expense if the business is the beneficiary or the policies are for employees.
Look into how Ethos works, and consider getting life insurance online. We offer term and whole life policies, but only whole life includes an investment feature. Still, both types of policies can generally be paid using online bill pay.
The information and content provided herein is for informational purposes only, and it is not to be considered legal, tax, investment, or financial advice, recommendation, or endorsement. You should consult with an attorney or other professional to determine what may be best for your individual needs.
