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6 Pros and Cons of Automatic Bill Payments

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Life is full of questions. From parenting to careers, daily life brings its share of the unknown. It’s true even with money. Where should you bank? Which investment professional should you use? Should you use automatic draft to pay your bills?

Fortunately, when it comes to automatic drafts, there’s no right or wrong answer. It depends on your personality and your approach to money. Consider these pros and cons before you decide.

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The Upside of Automation

The obvious advantage of setting up automatic payments is convenience. It ranks right up there with having your groceries delivered. We love anything that can make our lives easier! Here are a few other reasons you might like automatic billing:

Pro: You won’t get stuck with late fees. With automated bill payment, you’ll never be late, so you’ll never get slapped with huge late fees. A penalty here or there may not seem like a big deal, but it adds up. I’m sure you’d rather use that money to fix the plumbing instead of throwing it down the drain.

Pro: You don’t have added stress. If you’re set up to have your bills paid automatically, you don’t have to worry about them every month. You don’t have to search through mounds of junk mail to find them. And don’t have to figure out whether you can pay bills in between cooking supper and getting gum out of your daughter’s hair.

Pro: You don’t have to remember. Some people just aren’t good at remembering details, like when to pay a bill—even if it’s due at the same time every month! With automated drafts, you don’t have that problem. The bill gets paid from your account without writing a check or pushing a button.

The Downside of Automation

Even though automatic withdrawal has its benefits, it’s not a one-size-fits-all solution. There are some drawbacks to this approach to paying bills. Here are a few things to think about:

Con: You don’t get to say okay. When you set up automatic bill payment, money will go out of your account whether you want it to or not. There’s no safeguard in place to keep your account from being overdrawn. And that can lead to a bunch of bounced checks and overdraft fees, especially if several bills hit your account at the same time.

Con: You don’t feel the pain. When you pay bills through auto-draft, you don’t have to look at the bill or write a check, so you don’t feel the pain of money leaving your hands. This can give you a false sense of financial security.

Con: You can get lazy. When you don’t pay the bills yourself, you can get lazy with your money. You can stop reviewing bills to make sure they’re correct. You can forget why you’re trying to get out of debt (like that huge car payment!). And you can get slack in keeping your checking account up to date. Not good.

Even though automatic withdrawal has its benefits, it’s not a one-size-fits-all solution.

The Verdict

Whether you pay your bills manually or use automatic withdrawal, you still need to be intentional about making and keeping a budget. This simple habit will keep you on track and out of trouble. It gives every dollar a name and gives you boundaries for your spending.

That way, you’re not left pondering another question: Where did my money go?

Keep your budget on track and with you on the go by using EveryDollar, our FREE online budgeting and tracking tool.

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