While automatic bill payment may seem like a hassle-free option, there are a few things to consider.
These are a few things that should always be done manually, along with the potential consequences of not doing so.
1. Subsidy cable
Setting up an automatic payment for your cable bill is not the best option because, contrary to popular belief, these payments often accumulate in value and can be difficult to track.
2. Mobile phone bills
It should come as no surprise that cell phone plans include variable costs such as taxes and service charges. As a result, cell phone costs can increase, especially if data usage is excessive. As a result, the possibility of inadvertent overdraft increases.
3. Fulfilling your entertainment bills
Many people have one or more streaming services, but some still have a cable bill. And there are, let’s be honest, a lot of them. This makes it difficult to keep track of which websites you’re paying for when you set up automatic payments for things like Netflix or Disney streaming services.
4. Utility bills
Utility bills should also be paid manually as they vary with seasons and other factors.
5. Fulfilling Your Subscription Bills
Free trials and monthly subscriptions can be very useful for convenience. However, it is important to ensure that automatic payment or automatic renewal is not indicated, as this can lead to unwanted or unexpected deliveries and the creation of excess stock. Additionally, when clients are required to enter into an annual contract, memberships and free trials can become expensive.
Reasons not to use automatic payments to pay your bills
There are many reasons why setting up autopay for your bills isn’t always a good idea. First, carefully monitoring your account activity will allow you to identify and attempt to fix any system errors. Second, because you can track the quantity and amount of each transaction, physically paying some bills can help reduce the likelihood of fraudulent activity. Finally, it allows you to track your monthly expenses and prevent accidental overdrafts.
The benefits of using automatic payments to pay your bills
On the other hand, setting up automatic payments for your payments has many benefits. For example, it is more practical than keeping track of all payment dates or looking at the calendar.
There’s also no need to stress about forgetting and paying a late fee. Last but not least, it saves time because you don’t have to take time out of your hectic day to pay expenses. Learning to use autopay “responsibly” is therefore the best solution.
Achieving balance
The first step to paying your bills responsibly is finding a balance between tracking and paying as automatically as you can without being overly stressed. This means prioritizing the payments you have to pay manually and making room for some automatic payment options. Second, setting up automatic payments on multiple accounts is only a good idea if you’re confident that the total cost will stay the same each pay month. Third, set up electronic alerts to receive text or email notifications of charges or withdrawals.
Finally, calculate your average monthly expenses. If possible, it’s also a great idea to have a safety net if their monthly amounts are often the same. If your monthly utility costs are around $200, maintaining a minimum balance of $300 will prevent you from accidentally overdrawing.
Unfortunately, families who are barely making ends meet may not be able to implement this advice, but for those with a little extra, it could be the difference between an unexpected overdraft and no overdraft at all.
Always double check
It may be more convenient to pay bills automatically. But if you don’t check things often, they can get annoying.
Getting it wrong can be expensive and time-consuming, as you’ll have to contact every company linked to your account or put your bank on hold. As a result, whether you pay your bills automatically or manually, it’s most important to keep track of your most recent transactions. You will always have an overview of what is happening with your hard-earned money.
In conclusion, although automatic payment offers convenience and peace of mind by reducing the risk of late fees, it must be approached with caution. Some bills, such as cable, cell phone, and utility bills, may fluctuate or be subject to hidden fees that are more difficult to track with automatic deductions. By manually processing these payments, you can better track changes, avoid overdrafts, and maintain more control over your spending.
On the other hand, autopay can be an excellent tool for fixed, predictable expenses that ensure you’re never late on your obligations. The key is to find a balance between automatic and manual payments. By keeping a close eye on your bills and setting up alerts, you can take advantage of automatic payments without losing track of your finances. Always double-check your transactions, whether you’re using automatic payments or paying manually, to make sure you don’t get hit with any unexpected fees or changes. Ultimately, a well-managed financial strategy can help you avoid costly mistakes while making the most of modern conveniences.