Millions of successful household CEOs automate their finances in order to save time and money, and help them reach their financial goals. For example, prepaying your utility bills, the mortgage and other loans helps eliminate late fees and postage. And paying yourself first is painless. Especially when you make weekly or fortnightly automatic paycheck deductions to your IRA or 401(k) retirement accounts. However, computerized systems still make mistakes. That’s why it’s important to always stay alert and check your monthly statements for possible errors.
The bottom line: Automating your finances is a smart money management technique — putting them on autopilot isn’t.
Photo Credit: Ewen Roberts
I totally agree! My mortgage and car loan are the only bills on auto pay because the others change often and I like to ensure they are correct t first. The cable company is always trying to sneak extra fees in.
I automate most of my bills (rent, utilities, cell phone, internet, etc) – but I also track to make sure they go through and are the right amount.
Yes yes yes! I read a blog not long ago by a woman who set up automatic payments for her cable (I think it was), and months later she realized she was being charged late fees for some reason. Thing is, since she set up autopay, she was shredding her bills without even opening them! WTF???
Yes, I use autopay for just about everything I can, but I also review my bills when they come (either via snail mail or email) to make sure there are no errors. When I switched my phone from a land-line to digital, I had errors on my bill for 2 months straight. But because I reveiwed my bills before the date they were to be paid, I was able to get them corrected before they were overpaid. Diligence is a MUST.
The only bills I don’t automate are my COBRA health insurance premiums and payment for the outstanding balance on my credit cards. Even then, I automate the minimum payment. If a bill is out of whack, I’ll usually receive a notice from Mint.com letting me know that an invoice exceeded the average amount. Plus, I don’t have that many bills so it’s easy to identify when something is off just by looking at the activity on my account.
Great tip! Use it as a time saver, not as an excuse to never look at your bills!
I choose to invest and pay bills manually. But, I sure love using Bill Pay, instead of mailing out checks. It saves me a ton of time.
I reluctantly agree, though I admit I’m the laziest person on Planet Earth.
I do not automate my bill paying because I like to be intentional about paying them. I use that as an opportunity to review what exactly was on the bill and if the service is necessary, can be reduced, or even eliminated. Powerful 100 words!
Ditto.
Once you’ve dug yourself out of debt the hard way, you’re especially sensitive to make sure it doesn’t happen again. So I use online bill pay to make my payments, but I make all my payments myself, after I’ve reviewed the bill. The only exception is my ISP bill which only bills by automatic credit card charge.
I do automate paying myself first though – 401k, budget buckets, etc.
Completely agree! Things can still go wrong (ex. the credit card you pay bills on expired and you forgot to update the information) that can lead to bills not getting paid. You also need to review from time to time to make sure your automatic savings is still reflective of your goals.
Appreciate the recommendation. Will try it out.