In this day and age, almost everything is automated- car washes, cappuccino machines, even sidewalks now move for you. There's even Auto Bill Pay, where you can set up financial transactions that will occur on their own on a regular basis. In the words of that rotisserie commercial, "Set it, then forget it!"
That's all well and good, but I've always eyed Auto Bill Pay with much caution, mainly because I feel that, if I sit back and let the utilities and other companies automatically take deductions (which could vary month to month) from my checking account, I might become lax about double checking the actual bill. There's always the possibility of a mistake, and, should an error occur, it's much harder to fight the company for a credit (once they have my money, they're usually reluctant to return it). There have also been many situations where automatic payments have still gone through despite having cancelled the service.
On the other hand, you could use Autopay to help in your investments. The whole concept of "pay yourself first" is simplified when you set up an automatic deposit from your paycheck into your IRA or savings account. You can also choose to deposit a set amount each month into investment accounts such as Sharebuilder or Buyandhold, which then purchases fractions of ETFs or stock. The drawback here, though, as I learned the hard way, is that sometimes linked accounts/brokerages are slow to transfer money, meaning that sometimes although it says they withdrew money on XX/XX date, the balance doesn't show up until day(s) later. I ended up not having sufficient funds in my checking account because I thought my brokerage had already taken out the amount. Grrrr.
In summary, automatic bill pay can be helpful but I wouldn't put 100% trust into it. You still need to put in the effort to keep track of when your billing periods end, so your scheduled payments fall within the deadlines. It's just like driving on cruise control; you don't have to keep the foot on the gas pedal but you still need to stay alert for the bumps on the road =)
Use Autopay- but don't turn off your brain
January 26th, 2007 at 05:41 pm
January 26th, 2007 at 06:03 pm 1169834590
I am probably a little too conservative and extreme on that side. But overall good advice. Don't do it blindly - for sure.
January 26th, 2007 at 08:39 pm 1169843990
January 26th, 2007 at 09:07 pm 1169845643
http://www.freemoneyfinance.com/2007/01/quicken_2007_gi_2.html
January 27th, 2007 at 03:54 am 1169870095