2 Reasons I Don't Autopay My Bills -- but You Might Want To

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Gone are the days when "paying the bills" meant sitting down with an honest-to-goodness checkbook, envelopes, and stamps. These days, you can pay all your bills over the internet -- and you can even set them up to be drafted out of your bank account automatically, with no monthly intervention from you. Who wouldn't want that? Me. Here's why I don't utilize autopay -- even though it's the right move for many people (and maybe even you).

1. Fear of overdraft

I lived paycheck to paycheck for the entirety of my adult life, until very recently. This was due to a few factors, including paying off my education and having a career that was more emotionally than financially satisfying. In those days, the prospect of money leaving my checking account at any point without my direct involvement in setting up the payment was scary indeed. When you pay your bills and are left with very little in your account, having a surprise charge hit can ruin your day.

Will that extra expense result in a checking account overdraft (and a fee) -- or will it just make you sweat and worry until you get paid again? I wanted no part of this exercise, and to this day, autopay makes me nervous, even despite being able to leave more cushion in my checking account to guard against surprise bills.

2. Desire to feel in control of my finances

Here's my dirty little personal finance secret: I actually enjoy paying bills. OK, I don't necessarily love that so much of my hard-earned cash goes toward housing, utilities, and especially health insurance (the biggest downside of being a freelancer: no more employer-subsidized insurance). But I do love signing into my bank accounts on payday and sending the money where it needs to go.

I have a few techniques to keep the process as stress free as possible, and crossing paid bills off my calendar is very satisfying. And it's even better to see what cash I have left over and can move to my high-yield savings account, where it can grow and eventually pay my taxes, cover vacation costs, or go towards the purchase of my new house.

What about you?

Everyone's financial circumstances are unique, and what works for me may not work for you (or vice versa). So to that end, is it a good idea to set up autopay for your bills? Here's why you might want to consider it:

• Autopay can save you money on late fees: If you pay a bill late, you're generally assessed a late fee. It's usually only a nominal amount (such as a flat fee or a percentage of what you owe -- my electric/gas utility charges a late fee of 1.5% of the amount due). But why pay any extra if you don't have to?
• Autopay saves you time: I might enjoy the process of paying the bills, but it does take time every week. If you're short on time, you'll probably appreciate saving some by setting up autopay.

I advise caution with autopay in two scenarios. If you live paycheck to paycheck and setting it up puts you at risk of overdrafting your checking account, you might want to pass on it for now, like I have for so many years. And think long and hard about putting your credit card bills on autopay. Ideally, you're paying off credit cards every month so you can avoid interest charges. But it's likely that your credit card bills fluctuate, so you may not pay the same amount every month.

You can likely set up your account so you autopay the minimum balance, pay the card off in full, or pay another set amount every month. It might be a better idea to make that payment manually, though. That way, you'll know how much you're spending (and whether you need to cut back) and there won't be any surprises if you're set to pay the balance off in full and it comes in higher than expected.

Personal finance is just that: personal. If the prospect of saving time and reducing the impact late fees can have on your bottom line sounds appealing, you might want to set up autopay for your bills. But if you live paycheck to paycheck or just like having a steadier finger on the pulse of your cash flow, doing it manually might be right for you.

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