Automated bill payments not always a good idea
August 09, 2011 
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Many personal finance professionals will tell you that automating your finances is one of the best ways to manage your money. You can automate your pay cheque deposits, deposits to savings, RRSPs and investment accounts, as well as all of your monthly recurring bills.
But when you think you’re making your life easier by automating everything and not having to stress about whether you paid the bills on time, you might be doing more harm than good. Automating your finances can lead to bad spending habits, because you aren’t conscious of where your money is going. And, when all of the work is being done for you, you might not check on your accounts as often as you should.
I personally only automate the essentials – such as my pay cheque from my full-time job, my mortgage payment, and my maintenance fees. Everything else – such as utilities, cell phone, internet/cable, credit card bills, and taxes – I make as manual payments.
Here’s why:
My income fluctuates
Even though I have a full-time job, my income can fluctuate wildly from week to week, depending on how much money I bring in from my part-time and freelancing jobs. While it’s possible to budget and automate when your income varies, I find it’s a lot easier (and a lot less stressful) to manually enter in bill payments. Especially when not all companies and services offer monthly billing cycles that end at the end of each month. Instead, I keep track of when my payments are due by tracking them in Quicken, as well as in a Google calendar. That way, I always know that I have money in my account to pay each invoice.
I like seeing progress
It is extremely satisfying to click a few buttons and see bills getting paid, or my savings account growing. It’s proof that my hard work is worth something, and it reminds me that my goals are real and attainable. It’s a feeling you can’t get when the bank does all of the work for you.
Don’t forget to read the terms and conditions
Sometimes life can get busy, and by the time you get around to looking through your cell phone bill, you might have already had the payment deducted from your account. I worked in a call centre for a company whose terms and conditions stated that receiving payment is your acknowledgment and agreement to all of the charges on the invoice. So it’s important to look through your invoices in a timely manner, as well as carefully read through your terms and conditions of service with each company.
It forces me to pay attention
Over the past five years, I’ve made it a habit to log into my online bank accounts at least three times each week. This year I caught two fraudulent charges on my credit card. If my credit card bill payments were automated, I would be much less inclined to check my accounts as often, or as closely, so I might have missed catching and disputing those charges.
Companies make it so easy to automate payments. From your Netflix account to your gym membership to those domain names you’ve never used that keep auto-renewing every year – sitting down to pay your bills might take an extra hour out of each month, but it really forces you to see where your money is going. It helps you have a better relationship with your finances, and you might realize that you’re paying for a lot of things that you just don’t use.
Do you have your finances on automation?
But when you think you’re making your life easier by automating everything and not having to stress about whether you paid the bills on time, you might be doing more harm than good. Automating your finances can lead to bad spending habits, because you aren’t conscious of where your money is going. And, when all of the work is being done for you, you might not check on your accounts as often as you should.
I personally only automate the essentials – such as my pay cheque from my full-time job, my mortgage payment, and my maintenance fees. Everything else – such as utilities, cell phone, internet/cable, credit card bills, and taxes – I make as manual payments.
Here’s why:
My income fluctuates
Even though I have a full-time job, my income can fluctuate wildly from week to week, depending on how much money I bring in from my part-time and freelancing jobs. While it’s possible to budget and automate when your income varies, I find it’s a lot easier (and a lot less stressful) to manually enter in bill payments. Especially when not all companies and services offer monthly billing cycles that end at the end of each month. Instead, I keep track of when my payments are due by tracking them in Quicken, as well as in a Google calendar. That way, I always know that I have money in my account to pay each invoice.
I like seeing progress
It is extremely satisfying to click a few buttons and see bills getting paid, or my savings account growing. It’s proof that my hard work is worth something, and it reminds me that my goals are real and attainable. It’s a feeling you can’t get when the bank does all of the work for you.
Don’t forget to read the terms and conditions
Sometimes life can get busy, and by the time you get around to looking through your cell phone bill, you might have already had the payment deducted from your account. I worked in a call centre for a company whose terms and conditions stated that receiving payment is your acknowledgment and agreement to all of the charges on the invoice. So it’s important to look through your invoices in a timely manner, as well as carefully read through your terms and conditions of service with each company.
It forces me to pay attention
Over the past five years, I’ve made it a habit to log into my online bank accounts at least three times each week. This year I caught two fraudulent charges on my credit card. If my credit card bill payments were automated, I would be much less inclined to check my accounts as often, or as closely, so I might have missed catching and disputing those charges.
Companies make it so easy to automate payments. From your Netflix account to your gym membership to those domain names you’ve never used that keep auto-renewing every year – sitting down to pay your bills might take an extra hour out of each month, but it really forces you to see where your money is going. It helps you have a better relationship with your finances, and you might realize that you’re paying for a lot of things that you just don’t use.
Do you have your finances on automation?
