Many financial experts agree that automating your payments, bank deposits, and investments makes great financial sense, it isn’t always the case with all of your bills. Of course, the theory behind it that what you don’t touch you can’t spend. While in theory, that theory makes sense. You can certainly build up a nice 401k account or your savings account by automating such deposits but there are some areas where automating could cost you.

Automating your bill payments and savings deposits essentially means that you set up bill pay through your bank or through your creditor and each monthly payment is automatically deducted from your account on the due date you set. This is certainly a convenience to paying your bills on time each month which is essential for good credit but there are also some drawbacks. The number one being that if you are ignoring your monthly bill statements, you could be missing out on some savings.

Here are some things to consider when you set your bills on autopilot:

Your Utilities
If you are just paying for electricity, cable and phone month after month, you may be missing out. Looking over each of you bills each month gives you the opportunity to look for errors that can be corrected in your favor. You may also be missing out on better deals if you are not looking at the competition.

Insurance
You likely could be qualified to receive different discounts on your insurance bills every few months but if you aren’t asking for them, you might not get them. Check in with your insurance agent every three months or whenever there is a change in your situation. You might be able to reduce your payments and save a lot of money. If you are just paying automatically, you’ll probably forget to stay in touch.

Cell Phone Plans
In the cell phone industry, there seem to be new deals and upgrades every day. Although those deals usually require a renewed contract, they can often reduce the cost of your phone bill, get you a new phone for no cost, and even add additional features to your cheaper plan.

Renewable Services
There are occasions where you sign up for services that require you to enter your credit card or bank information and the monthly charges automatically renew and are deducted from your account. Many times the companies that offer this payment plan rely on you forgetting about them and thus you continue service and generate them tons of revenue. Whenever you sign up for something like this, make a list and keep track of what is automatically drawn from your account. Chances are good you stop using the services but keep paying for them long after. Even if it’s just $10 a month, in a year’s time it adds up to $120. You can find somewhere else to spend that money.

Automatically paying bills is convenient but in our busy lives we tend to forget a lot of what is going on behind the scenes. If you do use auto pay for your bills, make sure you keep tabs on them each month and at least look over the statements you are receiving. Nothing is fail-safe and mistakes can be made. Unfortunately it is your wallet that will suffer in the face of these mistakes.

Tags: auto bill payments, automated savings, bill payments, online payments

This entry was posted on Friday, June 26th, 2009 at 6:38 am and is filed under tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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