My thoughts on automatic bill pay

by Karen on September 7, 2008

I’m a firm believer in online bill pay. Who isn’t? Just a few clicks and the bills are paid. No stamps, no checks. It’s simple and fast. Like most technological innovations, I don’t know how people lived without it.

I don’t feel that way about automatic bill pay, though. While automatic debit makes things even simpler (you don’t even have to think about it!), I’ve always been incredibly uncomfortable with the idea.

I really like sitting down once a month and mindfully paying my bills. I like the peace of mind that comes with clicking and checking those bills off my list.

I don’t like the idea of money being withdrawn from my account without doing it myself. We build a cushion into our checking account, so there’s no danger of an automatic payment overdrawing our account. But I like that there are never any surprises when I check my balance. I always have a pretty good idea of what my balance is because I know what’s coming and going from my account. I don’t want to be reminded that a bill was due when I log in and notice that the amount has been deducted.

I like having control over when I pay my bills, too. I like to sit down close to the first of the month and get everything out of the way. When I was in college, I used to wait until the last minute to pay bills. I would check my balance and mentally subtract the bills that were due in order to figure out my “real” balance. I never paid them until just before the due date. This got me into trouble more than once. Why I didn’t just pay my bills and be done with them is beyond me. I most likely procrastinated because I was always strapped for cash, and I didn’t like seeing my balance go down.

Now that we don’t live paycheck-to-paycheck, getting those bills out of the way is liberating. I don’t dread it because I know the money is there, so I like to check it off my list.

Paying my bills myself every month allows me to monitor charges and possibly fix errors before they’re posted to my account. I don’t trust myself to take the extra time to look at my statements if I’m not sitting down to pay the bills.

Does this make me a control freak? Probably. But I think if there’s one thing that we should be control freaks about, it’s money. For me, automatic bill pay is a dangerously hands-off approach. I understand that it may be a real time saver for most people, but even in this automated world, I still like to have some degree of physical control over my money. It’s not going anywhere until I say.

Taking 20 minutes out of my day once a month to look over my statements and send my payments gives me the time to give myself a financial checkup. It allows me to double-check my budget to make sure I’m on the right track, and reconfigure things if necessary.

When it’s over I feel a wonderful, peaceful feeling of, “Well, that’s done.” I don’t want to worry about whether a computer glitch might botch my payment or not send it at all. I just want to know that it’s done.

I also love that when I look at my balance a few days later after all the payments have been posted, I know exactly how much money we have. I don’t want to look through my transactions to see if a payment has gone through to figure out my “real” balance.

What about you? Does automatic bill pay save you time or cause you stress?

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1 Mary September 8, 2008 at 3:50 am

I don’t disagree with this post, however, if you ever find yourself fine tuning your budget for dollars, keep in mind that automatic bill pay does often save you money. Most of my bills will give me a discount on my bill itself (up to 10% in some cases – Geico comes to mind) if I enroll in automatic bill pay. For me, it isn’t any different than paying myself, I put a reminder on my Outlook calendar (i.e. my lifeline these days) and make sure to enter it as though I’m paying it into my register. Many vendors will send you e-mail every time the bill is paid (or in the less green friendly sectors a paper receipt) Then, when I balance and pay my nonautomatic bills, I just make sure the amounts cleared right and everything adds up.

Honestly, I don’t use a ton of automatic bill pay either, for other reasons that aren’t really relevant here, but sometimes the little bonus you get for signing up makes it worthwhile.

(P.S. – I have another fantastic bread recipe, this one calls for wheat berries and the kids love it – let me know if you want it!)

2 Karen September 8, 2008 at 7:54 am

Mary – That’s a really good point, and one that I should have brought up. In my case, none of my current bills qualify for those kinds of discounts. But when I start paying off my student loans (finally), I could get a .25% interest rate deduction and another .50% off after 48 consecutive automatic payments. So you can be sure I’ll reconsider my hard line stance against automatic bill pay.

However, that will probably be my only bill that’s paid automatically. :)

3 Vanessa September 8, 2008 at 8:07 am

I only have two bills that are paid automatically, or at least were. The first was my car insurance but since were up for re-newing our premium we are paying the balance in full this month vs paying month to month. The second is my husbands student loan that comes out on the 3rd of every month.

I am very much like you, I like to pay the bill myself. I worry about ‘forgetting’ that bill because it automatically comes out. I have done that once and it messed the entire budget and accounts all up. I don’t want to go through that mess again.

Automatic bill pay in my opinion is best for those who are extremely organized haha.

4 Andrea September 8, 2008 at 8:48 am

I pay all of my bills automatically and I love it. While I would consider myself an extremely organized person, I think that it would work better for unorganized people since they don’t have to remember to pay their bills (as long as they keep a decent balance in their checking account and don’t get overdrawn).

A couple of years ago, I spent the summer traveling 4 days a week for work. Because I was so disconnected in my life, I actually forgot to pay my credit card bill one month! I can’t imagine how much worse it would have been if my other bills hadn’t been automatically paid for me.

As far as getting bills out of the way, I still get statements for most bills (the ones that change every month like utilities) and I just input them in my check register each month as I get the statements. Just like I would if I were to sit down and pay them.

5 Ariel September 8, 2008 at 8:52 am

I’m so glad to know that I’m not the only one that feels this way. I LOVE paying my bills online, short of my water bill because they’re ghetto… While I won’t lie, I do have some bills set up for auto pay, it’s the bills that I know don’t change. Things such as my rent, because honestly? Otherwise, it would always be late! But I agree with you. I think it my be a control issue on my part but I like knowing what my balance is and knowing what’s coming out when. I have found that a spreadsheet in Google Docs works wonders for keeping track of everything. I can browse through and see how bills have changed from month to month. At a glance, I can see their due dates, amounts, and how much we’re spending on the total bills in any given month. I love it!

6 Amy September 8, 2008 at 10:56 am

I used to be a fan of auto bill pay, but after a messy fiasco with AT&T, I have stopped all of the auto pays we have set up. I still love paying bills online, but I don’t like companies having my credit card number to bill at will. Online bill paying has definitely improved my quality of life (no stressing over when to send bills in), and at the very least saves stamps.

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