How far ahead are you on your bills?

[DLgal]

I told my son to pay off all his credit cards …why keep money in bank for hackers … nothing is safe online. He works for Disney so he knows he will be working forever ! Haha Seriously tho Is it safer to keep funds in certificate of deposit or money market . I didn’t want him to have auto overdraft protection-on checking connected to his savings .

Banks are FDIC insured...

 

[wishing4PA]

I told my son to pay off all his credit cards …why keep money in bank for hackers … nothing is safe online. He works for Disney so he knows he will be working forever ! Haha Seriously tho Is it safer to keep funds in certificate of deposit or money market . I didn’t want him to have auto overdraft protection-on checking connected to his savings .

I can't speak to the safety issue, aside from noting the FDIC insurance that was mentioned above, but it's smart to have those cards paid off, imho. Good advice!
I do think it's good to have some funds in CDs just because they are a tiny bit harder to access and helps with sort of a mental "do not touch before day X" way of thinking. But they aren't impossible to access early, according to what I've read. You just pay whatever penalty your bank or credit union has set. I've never redeemed one early myself though, b/c once it's in there, I just tell myself it's in there until maturity.

 

[crisi]

I used to do that, but then the companies would send me the overage back, and our balances wouldn't match, and they'd ping me for being late or underpaying since they had put a check in the mail that I hadn't gotten yet. So I stopped. I now tend to pay a little extra, but don't get months ahead.

 

[_19disnA]

Not sure the value of paying routine bills ahead (6-12 months) as the OP indicated in the original post. Paying off your home mortgage early will save you $$$ and that makes sense. However, on routine monthly bills like electricity/water/cellphone/cable TV, don't see any benefit to that approach and doesn't make any sense to me. Our HOA management company recently switched to a different company so I can see it being a hassle to try and get the old company to let new company know there was a credit balance. On things that are variable amounts based on usage (i.e. electricity, gas, water, etc.) seems it would create more work for you to keep track of the balance to know if you are being properly credited as the months go by. Not even sure if they let you 'overpay' those types of bills. At the very least, could involve a lot of your time trying to coordinate being their accounting department for no benefit.

Set aside money in your bank account if you want to be 'ahead' on future bills. If anyone you pay routine monthly bills happens to go out of business/bankrupt/etc. good luck trying to get a refund on any overpayment amount. I don't see any benefit to that and a lot of potential issues.

 

[dclpluto]

On things that are variable amounts based on usage (i.e. electricity, gas, water, etc.) seems it would create more work for you to keep track of the balance to know if you are being properly credited as the months go by. Not even sure if they let you 'overpay' those types of bills.

Yes my electric company lets you pay ahead. I don’t have gas or a water bill.

 

[DL1WDW2]

I can't speak to the safety issue, aside from noting the FDIC insurance that was mentioned above, but it's smart to have those cards paid off, imho. Good advice!
I do think it's good to have some funds in CDs just because they are a tiny bit harder to access and helps with sort of a mental "do not touch before day X" way of thinking. I've never redeemed one early myself though, b/c once it's in there, I just tell myself it's in there until maturity.

I gess I won’t worry… I purchased U.S. Savings Bond in1991 and he actually held onto and did not lose it or forget about it…
After 30 years the $500 original cost was worth $2073 recently.

 

[wishing4PA]

Our HOA management company recently switched to a different company so I can see it being a hassle to try and get the old company to let new company know there was a credit balance.

That absolutely can be a hassle!
I have been through that once when I paid just in time to be sure not to be late even though the company hadn't sent out bills.
It turns out the HOA was in the process of switching management companies, and it took a long time to get it all straightened out before the new company got the $ from the old company. In the meantime, I paid the new company just b/c I couldn't stand being considered in arrears.
(So then I had a credit toward the next payment, but not on purpose, just to not be considered "late" while they were sorting all this out. The old company was not good with recordkeeping.)
And yes, I should have kept closer tabs on the HOA activities, but this was around the time a family member died and needed a lot of care prior to that, so keeping up with the HOA just slipped down my list of priorities.

 

[Minniesgal]

Mortgage, ok fine. But why on earth would you pay ahead on anything else? If the poop hits the fan, you can cancel, reduce or sell almost anything else. Why give the companies your money to hold when you could be making even a small amount of interest?

my thoughts exactly why on earth would anyone want to get ahead on bills this is essentially paying for services not yet received.

 

[MrsPete]

If it makes you feel good, go for it. It's kind of like people overpaying their taxes so they can get a big refund. Not my thing.

That's a good analogy.

Of course we are retired and I know what our monthly income will be. Credit cards and utilities all on autopay.

Autopay could be a good option for someone like the OP, who wants to be feel "ahead". With autopay, you can't accidentally forget to pay.
And our electric company offers the option to "even out" all your payments across the year so you don't have a spiked bill in the middle of summer when you're running your air conditioner. They also offer the option to divide your bills into 11 months /skip December so you have more money at Christmas -- that seems to be a "lite version" of what the OP is doing.

We rack up the credit card rewards for instance we had a spend $300 on utilities and get $45 back (3 months) no brainer. In NH most homeowners prebuy oil in June at a discount so no surprises ... That is why I pay ahead as it pays me back!

Pointing out the obvious: If you use your credit card to pay your utility bills, you'll still get the $300 rebate ... just a couple months later.
On the other hand -- yes -- if you have a situation like "Buy next winter's oil in June and get a discount", it makes sense to pre-pay. Insurance often gives you a discount for paying a year at once, but most bills don't offer any pre-payment discount.

Yeah, you can't "pay ahead" on a car loan or mortgage. You will still owe a monthly payment until the loan is paid off.

You need to know the details of your specific loan; they aren't all alike. Not pointing any anyone on this thread, but I am quite sure that a lot of people don't understand the deatails of what they've promised in signing their loan papers.
In general you can "pay down" your principle, which means less interest in the long run.

Banks are FDIC insured...

Whereas, money paid to the electric company is not insured.

my thoughts exactly why on earth would anyone want to get ahead on bills this is essentially paying for services not yet received.

Sometimes we're required to do this; for example, if you have a streaming service on your TV, you're probably paying a month ahead. Some phone contracts make you pay a month ahead.
But if it's a choice -- yeah -- I'm with you.

 

[jbreen2010]

Some of these make sense. Our water bill used to be quarterly but is now monthly, so we just pay what 3 months would have been to save the stamp 3x

 

[georgina]

Some of these make sense. Our water bill used to be quarterly but is now monthly, so we just pay what 3 months would have been to save the stamp 3x

I don't have any bills that I have to mail something in to pay, all is done online. If it's not autopay, like DH's medicare premium, I go online to pay it. Some come directly out of my checking account, some go on a credit card.

 

[Karl66]

I might pay extra towards principle on our mortgage but no, I'm not sending extra to water, electric, cable etc. I like keeping money with me for as long as possible. However, you do what you feel is best for you.

 

[wishing4PA]

Some of these make sense. Our water bill used to be quarterly but is now monthly, so we just pay what 3 months would have been to save the stamp 3x

I have a family member who does that. I think his reason isn't so much the stamp, just the water bill is one of those silly little bills that in his opinion, and mine, really is just simpler to pay quarterly.
Again, I realize some people consider auto-pay the simplest method. I really don't, since I still need to keep track of it. I also had a friend who ended up fighting a utility that kept taking money out of his account even after he had closed the utility account, paid all his bills including what should have been the final closeout bill, moved to a different state, and closed the old bank account to open a new account in his new state. There was some mistake on their part, okay, mistakes can happen, but it snowballed into a whole mess because the bank account got automatically re-opened due to the debits hitting it, yet didn't have any money in it, b/c it had been closed, etc.
Now that was something like 20 years ago, and it probably was a rare thing to happen then and maybe that doesn't happen anymore, but I decided I'd rather be in control of when I pay, than leave it up to other companies to withdraw when they want to withdraw.

 

[RamblingMad]

I can't speak to the safety issue, aside from noting the FDIC insurance that was mentioned above, but it's smart to have those cards paid off, imho. Good advice!
I do think it's good to have some funds in CDs just because they are a tiny bit harder to access and helps with sort of a mental "do not touch before day X" way of thinking. But they aren't impossible to access early, according to what I've read. You just pay whatever penalty your bank or credit union has set. I've never redeemed one early myself though, b/c once it's in there, I just tell myself it's in there until maturity.

Given the rates of CDs, I'd rather be in I Bonds.

 

[Mackenzie Click-Mickelson]

I think there needed to be clarification on what "all my bills" meant.

OP were you more talking about was debt? Paying down a principal balance on debt owed if you can can help assuming one is in a state where there is no penalty for paying off early.

But I don't imagine many people get an advantage of what amounts to overpaying each month for their cell bill, their electricity bill or whatever and that doesn't seem to be as much financial sense to do so. There may be other reasons to do so though. As a budget reason if your balance changes from month to month and you're paying X amount you may not always have a credit rolling.

 

[Mackenzie Click-Mickelson]

Some of these make sense. Our water bill used to be quarterly but is now monthly, so we just pay what 3 months would have been to save the stamp 3x

Our water usage changes too frequently for that. Our home usage isn't too too far off but watering the lawn is very much dependent on the weather. We can usually assume summer months more but sometimes we're still watering in November and sometimes we'll get a wet June and not have to water as much.

That worked the same regardless of who was the utility company but the city we live in right now the water, trash and sewer bill are in one bill and are monthly.

We also have it auto drafted but you can also pay online. We don't even mail things much anymore lol except for Christmas cards.

We do have our gas and electric bills on level pay so that's more predictable but still is up and down where that's just a lot more work than needed just to pay ahead each time the bill is due especially when it fluctuates in the summer and winter a lot.

 

[MrsPete]

Some of these make sense. Our water bill used to be quarterly but is now monthly, so we just pay what 3 months would have been to save the stamp 3x

Stamps are so expensive now! Even if paying bills online wasn't so easy, I'd do it just to save the stamp. We're talking $2-3 per month. That's an iced coffee.

... just the water bill is one of those silly little bills that in his opinion, and mine, really is just simpler to pay quarterly.

Here the water utility people will shut you off without a second thought!
We had a problem once: we had just moved into our first house, and they shut our water off on our second or third day living in the house! Something about the people who lived in the house before us -- they were a couple months behind on their bill, and when the company saw that the water meter was moving again, they stupidly assumed it was the old residents using water. I had to physically drive to their office, show our turn-on paperwork, and explain that -- no -- we would NOT be catching up the former residents' bill. (Nice try, Water People.)

 

[momof2gr8kids]

I'm a month or two ahead on all our bills - hydro, gas, phone, internet, etc. Years ago when money was tight (dh lost his job, went back to school) I got into the habit of paying our bills weekly because we got paid opposite weeks. Hated getting the hydro bill every 2 months or the water bill every 3 months. I averaged it out paid an amount just slightly higher each week. Yes,I could have put it into a savings account until they were due but I found this easier to manage. I kinda stuck with that habit.

I like it because at least twice a year I hold off on paying. Nice in December not to pay any bills for a few weeks leading up to Christmas.

 

[Mackenzie Click-Mickelson]

Stamps are so expensive now! Even if paying bills online wasn't so easy, I'd do it just to save the stamp. We're talking $2-3 per month. That's an iced coffee.
Here the water utility people will shut you off without a second thought!
We had a problem once: we had just moved into our first house, and they shut our water off on our second or third day living in the house! Something about the people who lived in the house before us -- they were a couple months behind on their bill, and when the company saw that the water meter was moving again, they stupidly assumed it was the old residents using water. I had to physically drive to their office, show our turn-on paperwork, and explain that -- no -- we would NOT be catching up the former residents' bill. (Nice try, Water People.)

Did you not notify them that you were moving to that residence? Every time we've moved we've always contacted the utility service to start service in our name before we moved in. That should have prevented the issue and is something I've always had to do. I've never moved into a place without having a necessary utility service in my name. It's not a stupid assumption that the old residents were using water if no one notified them of new residents. All they had was service was still connected and unpaid in a person's name.

If I go online to start a new utility account with my city for instance I can only select moving dates in the future.

 

[barkley]

Here the water utility people will shut you off without a second thought!

we are on well now so it's not an issue but when we lived within city limits and had monthly water and sewage no matter how high an unpaid balance got-the water would never be turned off. the city (and many other cities in that state/region) considered it a risk to public health and safety for a dwelling to be absent water. no matter who was on the water bill as the responsible party it ultimately fell on the property owner b/c an unpaid balance after so long would result in a lien on the property. if you bought a home you made sure their was no outstanding balance on it with the water company through the title company, if you rented and the landlord had you pay it-you either paid it in their name under an account they had established or you had to get a specific form filled out with their signature acknowledging they knew they were on the hook for it (most landlords made people pay it under an account they set up so they could check for payments each month). when the housing market crashed in '06 there were lenders that were on the hook for tens of thousands in unpaid water bills to the local municipalities.