Every company offers automatic payments now,
So much so that it’s become the “cool way” to pay your bills – like covering the bill when you go out on your credit card knowing you’ll never financially recover from this.
But should you be signing up for automatic payments?
Well, let me start with this quote I really like:
“Automate smart and make dumb hard.”
Some people like putting as many things as you can on autopilot to make their lives easier…
Like having a coffee machine connected to their smart home or having autopilot on their Tesla so they can sleep on their morning commute…
(That last one was a joke. I don’t recommend sleeping and driving.)
Regular, recurring bills are in this category. Which makes sense. After all, some expenses never change or fluctuate like:
- Insurance
- Internet
- Phone Bills
It’s a big brain move if you want to simplify your payments. They can prevent you from…
🧾 Paying late fees
📉 Getting a ding on your credit score
🚰 Getting your water turned off
Not to mention, save a lot of time and headaches by paying your bills separately and some companies even give you a discount for signing up.
BUT… and this is a big butt…
“Hands Off” doesn’t mean “Eyes Closed”.
You’re still responsible for your monies.
That means you should still:
- Scan through your statements
- Cancel unused subscriptions
- Investigate suspicious charges
Having a car drive you on autopilot sounds sexy until you hit a wall because you kept your hands off the steering wheel too long.
There are also 2 instances where having autopay might not be the best decision to make:
- Tight Budgets
Autopay can be DEADLY on a tight budget.
If the payment fails, then you can be charged an NSF (Non-Sufficient Funds) Fee by both your bank and the company of $25-50 each.
Some banks cover a certain amount of these charges per year, but you should probably avoid doing this if you find yourself in a pinch.
But luckily, you listen to me and KNOW you should have extra money in the bank and not live paycheck to paycheck.
- Disputes
I know when people try to dispute charges with a company, they can sometimes sound like this:
“I’ll nEvEr LeT tHoSe GrEeDy CoRpOrAtIoNs TaKe AdVaNtAgE oF mY mOnEy!”
But if you have a dispute with a company about a charge or utility, you have ZERO leverage.
None. Nada.
They can just charge your account for however much you “owe” – and once they do, it’ll be A LOT harder for you to get your money back than if they couldn’t charge you in the first place.
You might never run into this issue. But if you do, you won’t have the leverage to tell them:
“You aren’t getting any money until you get this bill straightened out.”
If you’re not running a little tight with your monies and you’re comfortable with disputes, then opt-in for autopay.
It might be one of the better decisions you’ll make with your budgeting.
Taquitos,
Caleb Hammer
P.S.
While we’re talking about automatic payments:
I also GO CRAZY for dividend stocks that pay out recurring income to your investment account. It’s a great way to not be a dumb a** with your money and automatically chip away at your goals.
A great investing platform I like is MooMoo. They have a super easy to understand platform just like Robinhood or Webull except they have way better single stock analysis and offer a CashSweep program that offers 5.1% interest (APY) on your savings (similar to a high-yield savings account).
It’s something I’ve taken advantage of myself with my investments.
And if you sign up with my affiliate link here (which helps support the channel), you can get *8.1% APY for the first 3 months + earn up to 15 free stocks if you deposit $1,000 or more.
* Promo 8.1% APY (as of 01/11/24): The Base Rate is 5.1% APY, plus a 3% temporary boost is available once the coupon is activated. The actual APY earned may differ based on when the user activates the coupon, as the base rate may change, or if different coupons are stacked together. APY Booster Rate is effective for 3 months on up to $20,000 in the Cash Sweep Program once coupon is activated.
The Cash Sweep Program is a feature of the brokerage account and should not be viewed as a long-term investment or savings option. The APY might change at any time. Neither Moomoo Financial Inc. nor any of its affiliates are banks. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. Securities are offered through Moomoo Financial Inc., Member FINRA/SIPC. The creator is a paid influencer and is not affiliated with Moomoo Financial Inc. (MFI), Moomoo Technologies Inc. (MTI) or any other affiliate of them. The experiences of the influencer may not be representative of the experiences of other moomoo users. Any comments or opinions provided by the influencer are their own and not necessarily the views of MFI, MTI or moomoo. Moomoo and its affiliates do not endorse any trading strategies that may be discussed or promoted herein and are not responsible for any services provided by the influencer. This advertisement is for informational and educational purposes only and is not investment advice or a recommendation to engage in any investment or financial strategy. Investing involves risk and the potential to lose principal. Investment and financial decisions should always be made based on your specific financial needs, objectives, goals, time horizon and risk tolerance. Any images shown are strictly for illustrative purposes. Past performance does not guarantee future results.
