I was talking with a friend the other day about how to simplify our lives and somehow we got on the topic of automatic payments for our bills. He explained that he was scared to give companies his account information because they could possibly use it for unauthorized charges. I told him that they had his information every time he sends in a check to pay a bill. I support automatic payments because it has made my life much simpler and less stressful. Here are 5 steps you should take when setting up automatic payments and how to keep your information safe:
1. Get Your Finances in Order – If you are living paycheck to paycheck it may be difficult to do automatic payments, but not impossible. You need to make sure you will have enough money to cover your bills on the dates you have designated for the payments. Choose payment dates that fit your pay cycle. I have found that many companies will work with you on payment dates.
2. Choose Bills to Auto-Pay – Write down all the bills you pay each month and check to see if they offer auto-pay. Choose which of those bills you don’t want to worry about paying online or by check. This can be all your bills or a select few. The only bills I don’t have on auto-pay are magazine subscriptions. I like the deals they try to entice you with when your subscription is about to run out.
3. Keep Records – Document every company you give your account information too, their contact information and the date of the auto-pay. This way if you move or need to cancel an auto-pay you have the information easily available. This will keep your information secure because you will always remember everyone you gave it to.
4. Review Bills – Once you have setup auto-pay this doesn’t mean you can ignore your bills. At some point each month make sure the amount of the bill is matching what is withdrawn from your account. This is the best way to make sure your account information is properly used.
5. Credit Cards – I don’t recommend setting up your credit cards to auto-pay the outstanding balance because this could overdraft your account if you had a large expense on the credit card. Instead setup your credit card to auto-pay the monthly minimum balance. You won’t have to worry about paying the bill on time and you will never incur late charges.
Automatic payments have helped simplify my life and they allow me to spend more time doing things I enjoy. It will save you time and you will never have to worry about incurring those pesky late charges. Are you scared of doing auto-pay? If you do auto-pay, are you happy with it? Let me know in the comments below.
“There’s always something to be thankful for. If you can’t pay your bills, you can be thankful you’re not one of your creditors.”