Why does whether the bill vary in amount affect how easy it is to pay by autopay? I have every bill, including credit cards (which vary wildly from month to month) set up on autopay. And I review my finances at least monthly (and usually much more reguarly) - I get notices of every autopay before it happens. I just do not have to take ANY action to ensure the bill is actually paid. There's no risk of a bill creeping up in amount based on how I pay it.
I'm embarrassed to say that I didn't even know you could do an autopay. I thought all the utilities etc only did autopay if the amount was constant, ie if you do the equal billing plan which I never do.
I'll have to look into this new invention.
Mike Holman
Money Smarts Blog Investing and Personal Finance
In my case I guess it's because I worry that a big Visa bill will come up when I'm away on vacation and autopay will take care of it leaving me with an overdraft, or at least without enough cash to cover my expenses. Maybe that's an impossible scenario, but I do remember a few glitches once when I was in Europe and some bills were automatically paid out of my account in Canada and I no longer had enough in my account to cover an emergency cash withdrawal at an ATM. I tend not to keep a huge balance in my chequing account since it earns so little interest, so I'd rather manually transfer money in to pay bills when I need to. With autopay I feel like it's a little to automated for comfort. But that's just me, maybe I'm missing part of the picture (which wouldn't surprise me).Originally Posted by MoneyGal
the silver star version is to autopay directly from a broker margin account so that no bill will ever bounce ...
& the gold star version is a truly well-padded margin account.
I don't need my junk mail every day...they would save millions just by having every other day service. If I need something for work expedited, we gladly pay for that service.....but regular mail does not need to come every day.
The one argument against autopay as I see it is as a precaution against any exceptional bills. It is easier to fight an erroneous or unreasonable bill (like a $4000 cell phone bill, etc.) before you pay it, rather than after.
I also think it's a personal issue: I've learned from past experience that the more I automate my finances, the less I pay attention to them, and things gradually slip out of control. It all has to do with me and my particular quirks, not with the system itself: I'm sure MoneyGal can automate as much as she likes and still maintain tight control, but through trial and lots of error I've discovered that doing almost everything manually works best for me. I use Quicken but don't download my transactions, I enter them by hand from receipts. I do have several bills and monthly donations paid automatically with my credit card, and a few paid automaticaly through my chequing account, but after having both my credit card and debit card hijacked several times over the past five years and having to deal with all the headaches of re-setting those monthly withdrawals I now prefer to pay most bills manually online as they come in. Maybe I take "set it and forget it" too literally...it's just too easy for me to stop paying attention to my daily transactions altogether, so I overcompensate by paying too much attention to them.
Well, to be frank, for about six months last year I was living on the road. I wanted to automate as much as possible because do you know how hard it can be to find an internet connection (never mind a FREE internet connection) at some random airport in the US Midwest, so you can pay your cellphone bill? (Or how much you do NOT want to attend to that after a day on the road?!)
Also - I get e-mail notifications of EVERY bill that is autopaid. I can place a stop on any bill which I am going to contest. The ONLY part that is automated is the payment. No payee is going into my account without my explicit permission and my foreknowledge of the amount that is to be autopaid.
I did think of one thing I love the mail for, though, apart from packages: magazines. I get maybe 5 or 6 different magazines. It's a total luxury. I love to lie in bed and flip through decor magazines. Yesterday I got both House Beautiful and Real Simple - a banner day for me (also because I was in a bike collision and I was able to lie in the bath, recuperating and reviewing a decor mag. Heaven!)
But the trick - as Brad has said - is to find what works for you, and then follow THAT system - mindful of the risks with any system (no autopay: random middle-of-the-night realization - "I forgot to pay the phone bill!" versus autopay: "I could be billed a large amount in error!").
Sorry to hear about the bike collision, but it sounds like the bath and magazine helped ease the pain.
Oh no! Did you collide with another bike? car?
Mike Holman
Money Smarts Blog Investing and Personal Finance
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