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Why We Auto-Pay Our Bills

Last week, I saw this article in Kiplinger’s where Amanda Lilly and Stacy Rapacon debated the merits of automatic bill-pay [3]. They both make great points, as well as recommendations for products that can help monitor your bill payments, but I think that automatic bill paying wins out. We auto-pay the bills that let us for a variety of reasons, which we’ll discuss below, and we have systems in place to help us manage the process and ensure that we don’t get dinged insufficient funds or other fees.

First, let’s talk about the systems. We auto-pay all of our bills from our Ally account, which is a combination savings and checking account with overdraft protection. Our savings account contains enough cash to coverage a couple months’ worth of expenses and is our free overdraft protection on the checking account, which pays all of our bills. Every month, we get email notifications of our bills and since we only pay two credit cards and a utility bill, I have a good sense of what those values should be. (I also check the credit card bills every month for strange charges)

So far, we haven’t had any problems. Now – onto why we do this instead of pay them manually (especially since it’s just three bills):

It’s Simpler & Easier

The days of sitting on the dining room table and writing checks to pay your bills are over. I couldn’t imagine spending that much time doing that but I understand the comfort in knowing you paid a bill, even if you were dropping it into the mail and had no guarantees your check would make it. 🙂 We spent a lot of time simplifying our finances, moving down to two credit cards and reducing the number of financial accounts we had, and so that’s why our bill pay only involves two credit cards and a utility bill. We get emails from the companies when a bill has arrived, we know autopay is set up, so we just review the tranasctions and confirm our bank account has the necessary funds. It’s simple, it’s easy, and we are assured everything works as it’s supposed to.

It’s Cheaper

Bill pay means we save ourselves time, which is money!, but also we save ourselves a stamp. The current price of a stamp [4] is 46 cents. If you can save time and money, even if it’s only a little bit, it’s a win.

It’s More Reliable

The payments are electronic, which means we avoid the physical mail system and the possibility that something could get lost. I believe that 99.999999% of all mail gets to where it’s supposed to be but I don’t want my electricity shut off because I won the unlucky mail lottery and my utility company didn’t have the brains to ask me about it (which is a bad example because our utility bill payment is still done by check – the bank sends it). Being able to send my payment electronically means I don’t have to worry about the minute possibility that it’ll get lost.

It’s Fun

Ok, it’s not fun to pay bills. Autopay won’t make it fun, but it will reduce the un-fun factor of paying your bills by doing it automatically for you. 🙂

Do you autopay? Why or why not?

(photo: Killer App [5])