To Automate, or Not to Automate

Lately I've been giving my personal finance systems a lot of thought. What is the best way to track my expenses (I've yet to figure it out)? Am I allocating my savings in the way that makes the most sense? Should I automate more, or less?

Right now I'm both automated and unautomated. Payments for cell phones, my yoga studio membership, Netflix, and charity, for example, are automated, as are my transfers to savings and savings subaccounts. The payments for bills like individual health insurance, gas service, and car insurance require paper checks for various reasons.

Automating sounded smart, but lately, I've been wondering if automation isn't making me lazy, which might be costing me money.

An automated world
These days it seems you can automate just about anything. Usually all it takes is a few clicks of the mouse to setup automated payments for your monthly spending, such as the following:

  • Electric
  • Insurance
  • Cell phone
  • Cable
  • Membership fees
  • Credit cards
  • Rent/mortgage
  • Car loan
  • Student loan
  • Grocery delivery
  • Charity

You can automate your savings by setting up monthly transfers from your checking account to the following types of accounts:

  • Retirement, such as a 401(k) or Roth IRA
  • Traditional savings account
  • Online savings account
  • Money market account

There are a lot of benefits to automating. Sure, it can take time to set up, but once the system is in place, it happens automagically. You'll never again have to hunt for the checkbook, stamps, and envelopes — in the long run, it can save time.

Automation can save money. Paying each bill the long way means you have to work with a lot of due dates and passwords each month. It's easy to forget, pay late, or pay the wrong amount and rack up fees. It's also easy to not transfer $200 into your emergency fund because you overspent or just plain forgot to do it.

It also might be a more secure method. The Identity Fraud Survey Report by Javelin Strategy and Research found that one way to lower your chances of becoming a victim of fraud is to go electronic — paper statements and checks coming and going from your mailbox aren't the most secure way to go. Also, paying bills individually online puts you at more risk if scammers install password-capturing software on your computer.

Downside of automation
While automation has its benefits, there are downsides to consider. For example, the past few months, I've been sort of just skimming my credit card statements. I used to be much more vigilant about checking statements, and catching mistakes has saved me money. Automation means my bill will be paid, whether I inspect it or not, and it's easier to let it slide or forget to review it.

Besides mistakes, you might also miss when a service provider increases their fees. Maybe it's a big enough increase that would make you want to cancel, but with autopay, it goes unnoticed. It also makes you less likely to cancel services you're no longer using, such as a gym membership. I'm not even sure if gyms still allow you to pay month-to-month, but writing a check for a membership you don't use makes it more real than an automatic charge to a credit card.

Other ways automation can cost you? Fees. Yes, we just talked about saving money by never paying a late fee, but on the other hand, if you don't keep up with the dates of your automatic withdraws and your bank balance, you could incur overdraft fees. You also might be less likely to pay extra toward debt, such as a car loan, because it requires extra steps you don't have to take.

Then there are issues with giving a biller access to your account. If they make a mistake, you are stuck sorting out the mess of overdraft fees and getting the funds reimbursed. The New York Times reports:

So how often does this happen? Nacha — the Electronic Payments Association, a nonprofit association that oversees the network that automated payments travel on, says the error rate is 38 for every 100,000 bill payments. This figure counts mistakes that banks report but doesn't include problems that consumers solve directly through the billers. (Nacha once stood for National Automated Clearing House Association; automated bill payments are one of many kinds of A.C.H. transactions.)

If an error occurs…rules…require banks to automatically credit customer accounts for the mistake. Consumers get the credit as long as they inform the bank of the problem within 15 days of receiving the bank statement with the error on it. People who miss that deadline still have recourse under federal rules, which give consumers 60 days to report the error, but the credit could be provisional at that point until the bank determines who's responsible for the error.

You'll probably get your money back, but not without some hassle. I had a related issue with an old gym membership. Two years after canceling, I saw an odd charge on my statement from a gym billing company. Turns out a new company bought the chain, and they were given my account information, so the auto-billing started up again. The issue was resolved, but it was annoying that the company would keep and pass on my billing information.

In addition, if you switch banks or have to close a credit card account, you'll have to reroute your automated system. Expiring credit cards can be a problem, as well, although as The New York Times reported, Visa and MasterCard allow merchants to get new expiration dates automatically. Unless and until that becomes the standard, you'll have to remember to call billers when your expiration date nears.

A happy medium?
I don't like how lax I've become about checking my statements. That's going to change. But I don't want to unautomate, either, so is there a happy medium?

As The New York Times article suggested, you can automate your financial life and still keep a high level of awareness, so long as you don't view automation as a set-it-and-forget-it situation. Two solutions prescribed:

  1. Make a list of automatic deductions and check them off against your bank statements each month. Before checking a deduction off the list, view each bill and statement carefully to check for errors.
  2. Keep a cash cushion in your checking account as your own overdraft protection.

That sounds like a good method that gives you the benefits of automation while mitigating the risks, but what do you think? Are you automated, unautomated, or somewhere in between? Why did you settle on that system?

More about...Planning

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
86 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Ross @ Go Be Rich
Ross @ Go Be Rich
9 years ago

I agree to a certain extent about automation making a person lazy. For example, the only bill I have that isn’t automated is my monthly rent. Because I’m so used to never having to worry about paying my other bills, I sometimes realize I haven’t put my rent check in the mail until it’s almost too late. It’s also funny how much of a chore it now seems to sit down, write a check out, address the envelope, slap a stamp on it, and then throw it in the mail. As far as keeping up with those statements, I have… Read more »

Sophomore
Sophomore
9 years ago

One way to think about automation is push (good) versus pull (bad). A push transaction is one that you initiate – probably a bill payment from your online banking account to a merchant. A pull transaction is one where the merchant initiates and draws from one of your accounts – such as a gym membership hitting your credit card. If a merchant requires you to have a periodic pull (with them in control), you should either re-establish (new merchant) or cancel these services.

Nicole
Nicole
9 years ago

I automate anything that can charge my credit card and don’t automate anything that can’t. That way I can check when I get my cc statement and I don’t have to worry about bank mistakes.

Nancy L.
Nancy L.
9 years ago

I don’t automate my bills. Besides the frustration of trying to regain money if they mistakenly take too much, it’s too easy to become complacent and miss small things on your bill. Back in the era of 900 numbers, a common scam was to bill a tiny, unnoticeable amount one month, then slam the account the next. If you paid the first bill without question, you were on the hook for the second bc they assumed you’d made the charges both months and now regretted that you’d spent too much. I’ve found fraudulent charges of as small as $1.10 on… Read more »

indio
indio
9 years ago

I cautiously automated all of my bill payment years ago. I was surprised at how much time it has freed up and saved trees in the process, because an email doesn’t use paper. In fact, I probably write out about 25 checks per year total. With auto payment, I never have any late fees and I get account alerts for any transaction over $50 emailed to me daily. If a suspicious or unexpected charge hits my account, I find out about it within 24 hours without having to log into my account. For me the best part, is that I… Read more »

Wanderer
Wanderer
9 years ago
Reply to  indio

Indio, just curious is it through your bank that you get notified of the larger transactions before they go through? That would be a really handy feature.

My method for keeping my automated bills separate from our main checking account is to use an entirely separate account and using the direct deposit feature at my office to regulate the amount of cash flow in.

El Nerdo
El Nerdo
9 years ago

Hell no, I don’t save my card or checking account numbers with anybody. Just ask the customers of the Sony Playstation Network. I put bills in my iCal as reminders, and the calendar sends me an email in advance or starts bugging when things are due, and I may pay or reschedule that day, but I’m not handling control of my money to anybody else if I can avoid it. I pay everything online though, with card or bill payer, and the only check I pay each month (rent) is an e-check. Yes, there is still some risk in this… Read more »

JakeIL7
JakeIL7
9 years ago
Reply to  El Nerdo

Actually, as far as security goes companies store your credit card number no matter what. Ask the customers of TJMaxx who got hit a few years ago. No recurring bill but the merchant stored the CC data in thier system in case there were issues with the processing. USING YOUR CREDIT CARD ANYWHERE IS INHERENTLY DANGEROUS. That does not mean you shouldn’t use them (I use mine everywhere I can) but you MUST watch your CC account and review each transaction. The other issue you bring up is real: giving a company access to your credit card or checking account.… Read more »

H
H
9 years ago
Reply to  JakeIL7

It is true that most retailers automatically save CC info, and I find this very invasive. If you go to return merchandise at many stores, they don’t even want to see your card because everything is saved in their system. However, I’ve gotten notifications in the past from a few stores that their computer systems were breached and CC info was stolen.

So, I check CC/debit purchases every few days carefully.

Lisa
Lisa
9 years ago
Reply to  H

I often use Virtual Account Numbers (VAN) for online purchases. Given that these are available, I wish I could get a VAN that was only good for charges made by a particular merchant. Then if someone stole, for example, Amazon’s credit card database, they wouldn’t be able to use my Amazon-only CC VAN because the card number and merchant number wouldn’t pair correctly.

El Nerdo
El Nerdo
9 years ago
Reply to  JakeIL7

Wow, I wasn’t aware they were storing my CC info anyway. Thanks for the information, and yeah, it helps to know that.

Jaime B
Jaime B
9 years ago
Reply to  El Nerdo

I’m the same as El Nerdo. I have an automatic payment set up for my mortgage and my student loans, but it’s initiated from my bank to them rather than the other way around. All of my other bills I pay through my bank’s online bill payment service. If someone is going to make a mistake on the amount paid, I want it to be me. I find it vastly preferable to risk a late payment rather than risking that the biller in question “accidentally” takes out too much money. It can be too difficult to get that money back… Read more »

Thea S
Thea S
9 years ago

I automate several bills, but find automating my savings is the best thing. Imagine my surprise when I happened to be looking up a bill payment in my online checking account and realizing that the bank had failed to make two automatic deposits into my savings. I checked my automated transfers and sure enough, there was no mention of the automatic savings transfer. I called the bank and they told me they had no record of it and couldn’t account for how it got deleted. I was just grateful that it wasn’t a bill that neglected being paid. Bottom line,… Read more »

Patti
Patti
9 years ago
Reply to  Thea S

I agree with Thea. I have a notebook where I list one pay check per page, then underneath, all the regular bills that will deduct out of that paycheck. I check it against my bank account regularly (at least once a week, often once a day) and make sure that everything is paid and the bill is what I anticipate.

This is also extremely helpful in planning cash flow, and planning ahead for special expenditures (birthdays, etc).

Mom of five
Mom of five
9 years ago

What about putting the montly bills onto a credit card? That’s what we do and we reap the rewards too. No worries about overdrafts and there’s time to dispute the bill if you need to. We have two bills that we are not allowed to use credit cards for – the mortgage and the electric. THose I pay each month. I do have an automatic minimum payment on our credit cards in case disaster strikes and I am unable or forget to pay the bill. I pay our cc bills in full at least once a week and we haven’t… Read more »

Erin
Erin
9 years ago

The only bill that automatically comes out of my checking account is my mortgage. I also have $300 taken out and put into savings every month. The rest of my bills are paid online, but I receive an email notification first. Those bills don’t get paid until I click “Pay!” I do pay my water bill through snail mail because I would be charged $4.95 per transaction to pay it online. I’m not paying an additional charge to pay my bill online!

Kestra
Kestra
9 years ago

I automate as much as possible, but I still check every bill carefully. I always get them at least a week before the payment comes out, so if there is an error I can deal with it. I’ve never had an issue. I also use my credit card for bills too, to get the rewards. I have the credit card set up to automatically pay off the entire balance every month. Since I track every purchase, anything put on the credit card shows up on my spreadsheets so I know how much money I need in my chequing account to… Read more »

Epell
Epell
9 years ago

I have a quick question:
If you use automatic payment option for credit card, does it pay minimum due or full amount?

On more related note, I do lean toward automatic payment.
I have mint.com on my smartphone and I check it several times each day. I know when fees are posted almost as soon as they are up (I just caught fee increase for my internet service last month).

slug | sunkcostsareirrelevant.com
slug | sunkcostsareirrelevant.com
9 years ago
Reply to  Epell

Epell,

You can set your automatic payment for your credit card to pay the minimum, the full bill or some other set amt. It’s totally up to you. I pay the full bill automatically.

I agree with you that using a personal finance aggregator site like Yodlee or Mint is a great way to stay abreast of transactions and ANY fees.

No Debt MBA
No Debt MBA
9 years ago

I’m not really automated. Rent is billed automatically to my credit card (love the cash back on that) and my 529 contribution is automatic each month since it saved me the account fee. But nothing else is automated. My credit card bill is my only real monthly bill aside from rent and I like to review it before paying. Utilities are included in rent so a non-issue. Overall I’m happy with this balance, it keeps me actively involved in my finances day to day which I like.

Elizabeth
Elizabeth
9 years ago

At first I went a little overboard with the automating and I started to feel like I was living paycheck to paycheck! (Stress = not good!) Then I started to keep a spreadsheet detailing where my money is going, when and from which account.

I also have a spreadsheet with my goals for the year, so I enjoy going in and updating my progress. Doing so also makes me double check my statements, so hopefully I don’t miss anything!

Jacq
Jacq
9 years ago

I do the same as Nicole #2 with the credit cards (and there’s points). 😉 With the things that can’t be automated to be paid by the credit card, I prepay if they’re regular bills and have an automatic payment go through my account (not driven by the company, but driven by me). eg. for utilities, I just pay a flat $xxx every month and usually have a credit on the account. The enjoyment I get out of seeing DO NOT PAY on the bill is worth the foregone penny of opportunity cost. Now that my income is variable, I… Read more »

El
El
9 years ago

My bills aren’t automated, but my saving is; I use the ‘be your own employer’ method described here a few years ago. My paycheck goes to my ING savings, and then twice a month I get an automatic transfer from ING to my brick and mortar bank. One I pay my mortgage from, the other is for all other bills. Since I’m paid by my employer every two weeks but pay myself only twice a month, this funnels everything to savings except what I plan to spend. This has been great. I did have to wait until I had a… Read more »

Kevin H.
Kevin H.
9 years ago

I pay everything through my bank’s website’s bill payment service. Far superior to both paper (which anyone who intercepts now has your account info) and giving your card info or, heaven forbid, account/routing info to every company you do business with (which then lets them charge whenever/whatever they feel like, at their convenience). If you have to give out your card number, credit is better than debit … at least if crooks get your credit card number, they’re not stealing your actual money. Some of my monthly bills I have automatically paid, some I don’t. If it’s the same amount… Read more »

Austin
Austin
9 years ago

I think we are as fully “automated” as we can be. For us the advantages outweigh the negatives, and really the “negatives” are just being vigilant about our checking account balance. One good thing is that we get an emailed statement, so there’s a chance to look over all the charges before our account gets debited a week or two later… thus giving us a heads-up on any squirrely (?) charges. Great post!

Austin

Michael
Michael
9 years ago

I like the ING auto bill pay. Since I’m the one sending the money I can review and cancel charges before the go out. About 3/4 of my billers tie into ING to tell ING how much I owe, but they can’t automatically take money from my account. I usually have 2+ weeks from when I get the bill to when it’s due, so I have plenty of time to review it. The remaining 1/4 of my bills are loans or on contract so the price is fixed. I only have three bills not set up this way. Two are… Read more »

Debt Payer
Debt Payer
9 years ago

I automate my massive student loans because the federal governement lowers the interest a little bit if you automate payments. I will not automate my mortgage because I never have enough money with all my debt and it’s hard enough to always remember to have enough money is for when the funds will magically disappear. Not that paying by check is all that different. What I hate the most is the rare instances when a company charges you to automate–it should always be the inverse. Paperless billing and automated payments should always give you a slight break, in my opinion.… Read more »

J.R.C.
J.R.C.
9 years ago

I have 2 suggestions that would eliminate all the negatives you mentioned regarding automation. Add mint.com into your financial portfolio to see all of your incomes and expenditures and portfolio performance in one centralized location. As you review the transactions and match them against your budget, you’ll notice if there are any fraud items or mistakes, and you’ll also notice fee increases as it will no longer match your budget allocations. Secondly, instead of having your insurance company or credit card auto pay and pull from your bank account, instead set up your bank account to auto pay. That way,… Read more »

Adam
Adam
9 years ago

One savings that you neglected to certain bills that get lowered if you automate – these include some loans (some student loans, in fact) and certain life insurance.

Personally, I automate utilities and driver’s insurance. I keep a sharp eye on them, though, and have picked up errors in the past.

Kevin
Kevin
9 years ago

I have my savings on autopay, and my mortgage. Everything else I have on “manual” pay. A few years ago, I moved from an apartment to our home. Our ISP didn’t yet offer service to our new home, so we had to cancel and switch to someone else. The ISP was going to bill us for the entire month, even though we were moving in the middle. Moreover, they were going to bill us for the entire NEXT month, too, even though we would have moved out of the apartment weeks earlier. They refused to bend. They were on auto-pay,… Read more »

SLCCOM
SLCCOM
9 years ago
Reply to  Kevin

You could have closed the account and opened a new one. What a bunch of crooks!

Marsha
Marsha
9 years ago
Reply to  Kevin

I’ve changed the way I pay my mortgage because of a problem I had with letting them pull the payment out of my account. Last November, the mortgage company had a glitch in their computer that pulled a double payment out of my checking account–and the second payment bounced. I called the bank to stop the payment, because I saw online that it was “pending”, but there was no way they could stop it–I had to get the mortgage company to reverse it. It took them 10 days to give me my money back. I changed my account number and… Read more »

Adam P
Adam P
9 years ago

My theory, for whatever reason, is to automate bills that are fixed and unchanging each month. My insurance, my cable/internet, my gym, (and of course my retirement savings) are all automatically put on my credit card for rewards or from my bank account/pay check. The bills that change each month, I pay myself so I don’t get hit by a cash flow suprise. Sometimes the credit card could have a work charge I need to make sure I’ve been reimbursed for before paying, for instance. Or the phone company may have charged me crazy roaming charges (I live in Canada,… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago

Of course I automate everything, I’m a software engineer.

Jacq
Jacq
9 years ago

LOL – classic INTj response. The personality type that has a natural edge in the early retirement world. 🙂
http://www.personalitypage.com/INTJ.html

Eric
Eric
9 years ago

I automate what I can control. Vendors can bill my credit card automatically because I can contest that. My checking account can automatically pay vendors by using the bank’s bill-pay — I can control that. I don’t allow any vendor direct access to my checking account.

Lou Lamoureux
Lou Lamoureux
9 years ago

We used to have Verizon paid automatically by our credit card. The first couple of months were fine, but then they started adding little fees here and there. The amount every month was never the same and it was always above what we had originally agreed on. When we finally realized what was going on, we switched to paper bills (when skimming your credit card statement it’s easy to miss a $2 bump on a bill, we caught the problem when it reached around $12/month). After calling them, they continued for several months automatically debiting the credit card and would… Read more »

Debbie M
Debbie M
9 years ago

I don’t like to automate because I’ve heard too many stories of people having trouble undoing that. I still do automate when I get a perk (such as getting to pay my mortgage on the 7th but pay interest as if I had paid on the 1st) or when that’s the only way to do it (Netflix). I use a checkbook register to keep track of my spending (both from my checking account and from my credit card). To deal with the forgetting problems associated with automation, I enter those payments each month at the same time I enter my… Read more »

KM
KM
9 years ago

My only automatic payment is my mortgage and the monthly payment for my kids’ rented violin–which I only automated to get the best rates. These are taken directly from my checking account. Everything else I pay manually via my bank’s bill pay system–it takes only minutes each month, but I like reviewing my bills before I pay them. Especially with my cable company and cell phone, they often screw up the plan and charge me for things I didn’t order or they suddenly start charging me for a different plan. If I autopaid, I wouldn’t be catching those errors. I… Read more »

Anne
Anne
9 years ago
Reply to  KM

It’s kind of silly to talk about saving money by automating payments on a violin rental. You’d save much more money if you bought a violin outright.

Michael
Michael
9 years ago
Reply to  Anne

Ha!

1) Have you seen how kids treat their instruments?

2) How many kids who were in band still play their instruments? Not many. Lots of unused instruments sitting in attics, basements and closets.

Anne
Anne
9 years ago
Reply to  Michael

1) Have you seen the prices to rent instruments? A violin rents for about $20-30/month, sells for $100-200 (student/basic models).

2) That’s why you buy one of those instruments sitting in someone’s attic on Craigslist and sell it back on Craigslist when your kids get tired of it. I know what you’re going to say, the kids will beat up the instrument to the point that you won’t be able to resell it. If that’s the case, the rental agency won’t accept it back either.

retirebyforty
retirebyforty
9 years ago

We are somewhere in between. My mortgage is not automated because I am paying extra every month and that amount varies. The credit card bill is not automated because I want to keep careful track of what I spend money on.

My electric bill is not automated, not sure why not. It’s probably not an option, but I should check that.

Everything else is automated – retirement saving, internet bill, HOA, etc…

Eric
Eric
9 years ago

I automate very little, because I don’t trust most companies to just rummage through my checking account and take what they need. I have a few bills (cable bill, netflix, etc.) auto-paid through a credit card, and my mortgage payment gets handled through a “pull” ach transaction. Everything else gets paid via an e-check from my credit union, to avoid having to physically write the check. I’m still on the hook for having to remember to pull the trigger on paying my bills, but since I normally only keep a small buffer of cash in my bill paying account, I’m… Read more »

Derek
Derek
9 years ago

I automate everything except rent, which requires a paper check. To make sure our utilities companies can’t access everything in our checking account, I have sub-accounts in ING that hold just enough to pay each bill each month. The Monday after each payday, half of the bill for that month is transferred to its own account and sits there quietly until the bill is paid automatically. I love the hands-off approach but it took my S.O. some time to adjust after being so hands-on with her bills before we moved in together. Now she’s happy she doesn’t have to worry… Read more »

shorty j
shorty j
9 years ago

I don’t automate much, simply because manually transferring the money into my various savings accounts gives me a smug sense of satisfaction 😛

fantasma
fantasma
9 years ago

I am weird, I guess, I enjoy paying my bills myself.

I do use the automated feature for specific debts. However I click to pay everything else online.

Saving is more important to automate imho.

Andrew
Andrew
9 years ago
Reply to  fantasma

You’re not weird at all. I do the same thing–it never hurts to give yourself a momentary sense of accomplishment!

Stephanie
Stephanie
9 years ago

I have almost everything automated, short of my rent, main credit card bill, and my husband’s car payment (can’t pay that one w/out setting up another bank account, and it’s just not worth it). Not automating the CC bill means I look at the statement (online) every month, so I know what I’ve done. The best, though, is the automated savings I have. It’s easy to adjust (up for one, down for another since that’s tied to whatever extra I have in my paycheck, which changes when I hit the next tax bracket), and I don’t “miss” the money, since… Read more »

Jennifer Lissette
Jennifer Lissette
9 years ago

Personally, my household goes the e-bill route whenever possible. It offers the ease of electronic bill pay while still forcing us to check the amount billed every month. Currently, calling my cable provider is on my to-do list because our discount just expired and I’m not going to pay $70 for internet and 10 channels of television.

Ginger
Ginger
9 years ago

We mostly take advantage of automation when it benefits us, for example student loans and a personal loan I have. We do have verizon auto-paid to my credit card but I check that monthly. Otherwise we just list in excel sheet what we owe for the month, and set up payments from our banks/credit unions for that month.

Ely
Ely
9 years ago

In between. Savings are definitely automated. Mortgage and student loan payments are automated; these don’t change month to month and I like not having to worry about them. I’ve also had good experiences with both companies when making changes.
I don’t automate bills that change; I much prefer to look at them when they come in and THEN set up payment. I have ING so it’s been quite a while since I’ve had to write a paper check, or remember to get something mailed on time. 🙂

Cely
Cely
9 years ago

I automate almost everything via my bank’s bill pay, so that in case I need to cancel, I don’t have to wrangle with lots of individual companies; I can just cancel the payments at my bank’s site. I save more money, because the transfers to ING are automatic. I pay down my mortgage faster, because my monthly payment is above the minimum, and by automating it I can’t take back the extra payment easily. I recently automated my insurance payment as well. Normally I get two bills per year, but I divided the total by 12 so that the payment… Read more »

Kevin M
Kevin M
9 years ago

Automate everything, or as much as I can. I still review certain statements (cell phone, credit card, everything else is pretty steady) but I have better things to do than write and mail checks.

Kowala
Kowala
9 years ago

After years of watching my parents “pay the bills” old school style…I adopted technology solutions with open arms at a young age. I have been a pure automater for 3 years and couldnt be happier. I keep a buffer in my bank account for peace of mind. Most monthly bills are fully automated transactions, electronic debits straight from my ING bank account. Some require paper checks which again are automated and sent via online bill pay. I use Mint and have setup a budget showing those bills. This allows me to know if any bill is a dollar more then… Read more »

David S
David S
9 years ago

I am automated for almost everything that goes to another entity and for the things I use every month (garbage, energy, internet, CCs, mortgage) however I am very unautomated in getting money into the account they withdraw from, the energy bill I review each month (I have to enter the numbers by hand into microsofthohm.com) and then schedule a transfer from my energy savings account into the checking account. For the CC I make transferes throughout the month into a CC savings account for the things we buy, then schedule the full payment into the checking account on the day… Read more »

Jen
Jen
9 years ago

I automate my student loan payments to get the discounted interest rate. They pull from my checking account, which makes me nervous, but they don’t let me bill to my credit card (they don’t take VISA). Most everything else is automated, except for part of my credit card payment. I have the minimum payment automated so I never make a late payment. But since I like to pay it off every month, and sometimes the date when my checking account is flush varies by a few days, I pay off the bulk of it manually. That said, I do use… Read more »

KS
KS
9 years ago

I just ran into an annoying automation problem. We are moving to another country in 2 months and are having tight cash flow with fronting moving expenses, house expenses, etc. Since we are paid ahead by 6 months on a student loan we wanted to stop paying for a few months. Canceling the autopay meant that we lost the .25 interest rate reduction we were getting. We also will have to reautomate it ourselves; they won’t notify us. Nor were we able to put less than our monthly payment on autopay so we could continue to get the interest rate… Read more »

Curt
Curt
9 years ago
Reply to  KS

I lived in France for about a year, and I simply kept my U.S. bank accounts open. If you try to make a wire transfer for each payment, it’ll get expensive very quickly. If you make a bank-to-bank transfer between your foreign and U.S. accounts just a few times a year, it won’t seem so onerous.

average guy
average guy
9 years ago

Savings are automated (direct deposit into savings). 401K is automated (from payroll). Mortgage is automated (bank pulls from checking monthly). Extra mortgage is automated (I have a scheduled payment every month). All other bills I pay online, but only a few automated. Don’t think I would ever automate paying credit card bill (it would be too easy to be charged erroneous amounts); I always check CC bill every month against all the receipts I save. Don’t use E-Bills. But I run as much as possible (namely, all bills that can be paid with no extra fee) using credit card: since… Read more »

HH
HH
9 years ago

I love automation! It’s eco-friendly and saves time, not to mention all the money I save on stamps and checks, or gas driving around dropping bills off because I wait until the last second to pay them (this would be my mother)! When I can pop online and check my transactions through online banking, my cc website and Mint, which I do probably once a week or so, it’s super easy to keep track of everything. Far much more than with the paper mail, which generally gets tossed on the kitchen table and not looked at until I bother cleaning… Read more »

Suzanne
Suzanne
9 years ago

I automate everything that I can. It is less stressful since I don’t have to worry if a bill comes in when I’m travelling, or if a check gets lost in the mail.

The downside is that if your wallet gets stolen (which has happened to me twice in 18 months), you have to go into every account (and make sure you write down what they are – it’s a nightmare if something remains out there that you forget because it doesn’t get charged much, such as a toll pass) and change the billing to another credit card.

Megan
Megan
9 years ago

I automate all of my non-variable subscriptions (Netflix, HuluPlus, Xbox Live, etc.), my minimally variable utilities (electricity, cell phone, etc.), and my savings. I have systems in place (a text message from the cell phone company, emails from my banks autopay feature, mint.com) to ping me when bills are being paid automatically, and it what amounts. That way, if the price has gone up, or there are extra charges on my account (as has happened with my cell phone bill), I know about it in a timely fashion and can call to figure out what’s going on. The bills I… Read more »

kelleigh2
kelleigh2
9 years ago

I automate everything – I have one check each month I have to write to my cleaners, but otherwise it’s all automatic. I “virtually” pay the bills once a month so if you looked at my register, you’d see what the balance should be after all the bills are paid for the month. Then at least once a week I reconcile the register to make sure things are paid correctly (truth is I check it more than once a week via MINT, but only reconcile it once a week). I do check my bills to make sure nothing weird is… Read more »

Robert Withers
Robert Withers
9 years ago

For a few years now, I’ve automated as many payments as possible, using three different methods: charges against a credit card (business or personal), direct deduction from my bank account, and scheduled checks sent directly from my bank. I pay credit card accounts on the web with direct transfers from my bank accounts. The only checks I typically write are for medical co-pays, medical bills, and sometimes personal services. I pay for daily and local goods and services with my debit card as much as possible. I also keep records of cash expenditures as I pay them. This system enables… Read more »

Naomi
Naomi
9 years ago

Everything is automated – either to credit card or bank account. Even my credit card is set up to be paid in full every month from my checking account automatically. I still review all of the bills and balance my checkbook.

I keep a list in my financial spreadsheet of which bills are paid via credit card, so it is easy to update them when I get a new credit card number.

Laura
Laura
9 years ago

For me, only ING savings is automated (from checking), though I also have payroll deductions for retirement, a credit union savings account, and my bus/subway pass. Savings automation is a god-send, otherwise I’d find infinite reasons not to make that monthly transfer. Otherwise, it’s online one-time payments all the way. I get the ease of electronic payment with the flexibility and control of deciding when and how much to pay. Companies may have my bank info, but they’d get it from my paper checks anyway; more importantly, what they DON’T have is my permission to help themselves without my say-so.… Read more »

shares