If you are the forgetful type or if organization is not your strong suit, I totally understand why you would choose to have all your bills automatically paid.
After all, once it is set up you can just forget about it. You also don’t have to worry about late fees and interest charges.
Automating finances is hugely popular in the personal finance blogosphere. However, I personally beg to somewhat differ.
no worrying and forgetting are precisely the problem
Automating all finances can make you lazy. You don’t necessarily check your statements and bills anymore. It can make you spend aimlessly and overspend too.
service providers do make mistakes
Since they have access to your bank account or credit, it may be difficult for you to get your money back or a credit if you notice a mistake in your bill.
If money is tight, it could put you in a delicate situation if you overpay due to incorrect billing. You may not have the funds to pay for other items.
paying for a bill can mean you agree with the charges
Before setting up an automatic payment, please read the terms and conditions set by the service provider. It is not uncommon to see a full payment means acceptance of the charges.
if you don’t have the money in your account, you will pay fees and interests
Banks are notorious to charge overdraft fees and interests until your account is back in the black.
Your payment will go through but you will be dinged. Most bills are due at different times of the month, and are not always linked to your paydays.
these are the main reasons i don’t automate all my finances
Manually paying my bills forces me to check them and to pay attention to my spending.
The only bills I had to automate were my mortgage, my car payment and car insurance. I wrote “had to” because it is pretty much impossible to send cheques for these expenses.
What about you? Do you automate your finances?