Sometimes, I receive a letter in the mail with an incentive to pay my service with an automatic payment. The company may offer a coffee gift card or cash for signing up. Yet, although setting up auto pay is a convenient, time saving tactic, I'm hesitant to put my entire bill pay on auto pilot.
Forgetting About the Bill
Each month, when my bills start rolling in, I look at the numbers and make a budget. After figuring out how much my bills will be, I can figure out what I will have left in my account for food, gas and extras. On occasion, I forget about one of my automatic withdrawals. This can really mess up my budget. I always leave a little extra in my account for mistakes. However, if all of my bills were on auto pay, there would be a greater chance that I might forget about one.
Currently, I have three of my bills on auto pay. There have been times when one of the companies has tried to withdraw the money at the very end of the month. This is a time when my bank account is depleted. I have had to call my car and home owner's insurance to have the withdrawal date changed. I have also noticed that the withdrawal date isn't always consistent. This can pose a problem when you are wondering if money is going to leave your account or not. In one instance, the company completely forgot to take the payment out. Furthermore, "according to NACHA, the Electronic Payment Association, out of every 100,000 auto payments, 220 have errors." This is why I closely monitor my accounts for error. Of course, if I set up a recurring bill payment through online bill pay rather than allow the company to extract the money, I could limit these types of mistakes.
I would probably never put a big bill like my mortgage or credit card payment on auto pay. Since I am on a tight budget, I like to pay all of my smaller bills first. I pay my bills on time. However, there are months where I don't have a lot of money left over. For this reason, I would be afraid that I might have insufficient funds when the bill automatically went out. I remember the time when I received two overdraft charges. My account was only overdrawn by a few dollars. However, it was the auto pay bills that pushed my account over the edge. Before I knew it, I owed $50 in overdraft charges.
Although I would never put the majority of my bills on auto pay, I do like having a few come out automatically. I have these bills come out at the very beginning of the month. This ensures these bills are always paid on time. Still, in general, I like paying my bills manually. Automatic bill pay may be more convenient for some, yet it causes me more stress.
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