Ok, now everyone might not agree with me on this one, but I think it is definitely worth considering. With our busy schedules, moving into a new space, a few summer adventures and work, remembering to pay bills or review bills can be difficult. When we moved recently I decided to change all of our bills to automatic payments. This was easy as I was already changing our address so I simply updated the payment process at the same time. Now there are definitely a few things to consider when switching to automated payments, let’s take a look!
POINTS TO CONSIDER:
- BUDGETING – Just because you are switching to an automated payment plan does not mean you throw out your budget! It is still really great to budget each month and know how much each service costs. I currently have hydro, gas, phone and internet on auto payments, but I know my budget for each month as well.
- BILL TRACKING – Similar to remembering to budget for your automated bills you will also want the bills sent to you via email so you can review them, It is always a good idea to review bills, hydro can vary month to month and sometimes there are errors. For example last month hydro had made a mistake on the charge and had I not reviewed the bill I would not have noticed.
- SUFFICIENT FUNDS – Paying various bills automatically takes planning. Perhaps the bills come out of your checking each month but you don’t have sufficient funds and are charged for an overdraft, it defeats the purpose of paying automatically. I would suggest having a specific account for bills and at the first of each month transferring in the approximate amount required, obviously go over to ensure you have enough, or always leave a $100 buffer just in case.
- CREDIT CARD/ACCOUNT/ADDRESS CHANGES – Here is where automated bills can be difficult. Any account or card or address changes need to be updated or your bill will not be processed. When reviewing your bill each month, if any changes were made be sure to check they are correct. I had updated my new credit card information on all accounts but missed the address change on one and therefore was late for one payment. Late fees and interest can add up.
- LATE PAYMENTS – If your bills arrive via mail or email and you pay them at that time, they can sometimes be missed, maybe you didn’t see the email or you are away on vacation and missed the bill in the mail. Late payment fees and interest can add up on bills big or small.
- CREDIT SCORE – If you are paying when each bill arrives but miss multiple bills in a year it can affect your credit score. Although you may not be thinking of purchasing a home or a vehicle, your credit may be checked when renting an apartment or applying for a small loan. Something to consider is paying your bills on time.
These are a few points to consider when thinking about adding automatic payments. There is the possibility of adding automatic payments for a time to test it out. It is a little more difficult to cancel then add but if you are unsure if it will work for you, try it first!