Automating Payments
Every company offers automatic payments now,
So much so that it’s become the “cool way” to pay your bills – like covering the bill when you go out on your credit card knowing you’ll never financially recover from this.
But should you be signing up for automatic payments?
Well, let me start with this quote I really like:
“Automate smart and make dumb hard.”
Some people like putting as many things as you can on autopilot to make their lives easier…
Like having a coffee machine connected to their smart home or having autopilot on their Tesla so they can sleep on their morning commute…
(That last one was a joke. I don’t recommend sleeping and driving.)
Regular, recurring bills are in this category. Which makes sense. After all, some expenses never change or fluctuate like:
Insurance
Internet
Phone Bills
It’s a big brain move if you want to simplify your payments. They can prevent you from…
🧾 Paying late fees
📉 Getting a ding on your credit score
🚰 Getting your water turned off
Not to mention, save a lot of time and headaches by paying your bills separately and some companies even give you a discount for signing up.
BUT… and this is a big butt…
“Hands Off” doesn’t mean “Eyes Closed”.
You’re still responsible for your monies.
That means you should still:
Scan through your statements
Cancel unused subscriptions
Investigate suspicious charges
Having a car drive you on autopilot sounds sexy until you hit a wall because you kept your hands off the steering wheel too long.
There are also 2 instances where having autopay might not be the best decision to make:
Tight Budgets
Autopay can be DEADLY on a tight budget.
If the payment fails, then you can be charged an NSF (Non-Sufficient Funds) Fee by both your bank and the company of $25-50 each.
Some banks cover a certain amount of these charges per year, but you should probably avoid doing this if you find yourself in a pinch.
But luckily, you listen to me and KNOW you should have extra money in the bank and not live paycheck to paycheck.
Disputes
I know when people try to dispute charges with a company, they can sometimes sound like this:
“I’ll nEvEr LeT tHoSe GrEeDy CoRpOrAtIoNs TaKe AdVaNtAgE oF mY mOnEy!”
But if you have a dispute with a company about a charge or utility, you have ZERO leverage.
None. Nada.
They can just charge your account for however much you “owe” – and once they do, it’ll be A LOT harder for you to get your money back than if they couldn’t charge you in the first place.
You might never run into this issue. But if you do, you won’t have the leverage to tell them:
“You aren’t getting any money until you get this bill straightened out.”
If you’re not running a little tight with your monies and you’re comfortable with disputes, then opt-in for autopay.
It might be one of the better decisions you’ll make with your budgeting.
Taquitos,
Kaleb Hammer
