Paying bills on time has always been an issue for some people. Even the best of us have a month here and there where paying bills on times becomes difficult. With the introduction of online bill pay, many have found paying bills on time is easier, while others still find it difficult. According to a story from CBS MarketWatch, the following are five bills you should not set up for automatic payments (though you should use automation when saving money). The reasoning for why follows the list.
Paying Bills On Time: Bills To NEVER Automate
- Cell Phone
- Insurance Payments
- Gym Memberships
I agree with all five and will explain why for each.
There have been many articles about “cramming” (where a 3rd party company bills you for something you never agreed to). Because of this, you should always look over your monthly bill. If you set your bill up to be paid automatically, then odds are you will never catch these scams. You could end up paying hundreds or thousands of dollars that you never should have been billed for in the first place.
When you finally would catch the errors, good luck in getting your money back. You are going to be spending countless hours calling and arguing with your cell phone provider regarding the charges. After awhile, you will have to determine if the opportunity cost is worth it. In that I mean, are the headaches and the time spent trying to get your money back even worth it?
By not automating your cell phone bill, you will catch the error the first time and have a much easier time of getting your money back.
A second reason to not automate this bill is because your usage varies every month. If you are like many who automate, you never really look at your statement. So if you go over your data limit and get charged, you probably won’t realize it.
You may have signed up with a new insurance provider because they offered you a super low rate. If you autopay, you will be guaranteed of paying your bills on time, but you may not catch the increase in price after that first year.
Even if you didn’t switch providers, it is good to look over your coverage and compare to your last bill to see how much your premiums increased or decreased. Remember, the cost of insurance tends to go up and not down.
For this one, a little more detective work might be required. You may notice a spike in your electric bill and claim it’s from running the air conditioner. Which could be true. But it could be something else – something that is wrong with an appliance. It’s best to review your bill so you can catch spikes in your usage. If you notice a spike and haven’t done anything different, it’s time to do some digging around the house.
With that said, I like to look at my utility bill every month. When I get the bill, I pay it right away, so I know I’m paying my bills on time. But I like to see how much electricity I am using. There are plenty of ways to cut back on electricity use around your house in the winter and you can change out your light bulbs to save money as well. Of course, there are things you can do to boost the efficiency of your home as well.
Many people buy the annual membership in January, hit the gym for a month or two and forget it. If you are set up with a monthly payment that is automatically taken out of your bank account, you’ll end up paying for the year when you never go.
Even if there is a cancellation fee it still may be cheaper to pay the fee and be done with it. Additionally, there may be an auto-renew clause in your membership. You’ll be used to the $30 being taken out of your account that you won’t think about it even though you haven’t been to a gym in years. Think I’m crazy? I know of someone who paid for a gym membership for 3 years after they stopped going.
If you must use the auto pay feature to ensure you are paying bills on time (or the gym requires it), look into alternatives to the gym. Doing so will ensure that you aren’t paying for services you never use.
You buy into the special 12 month deal and set up auto-pay. Once the deal is over, the rates jump. Then in six months, the cable company increases rates again. You are feeling the squeeze in your bank account and don’t know why. You look into it and see that you used to be paying $100 for cable and now you are paying $175!
Or, if you are a lucky person like me who has Comcast, you get a different bill total every month even though you are on deal that guarantees your rate for two years. One month a phantom modem rental fee will show up. Then the next month a random add-on feature will somehow come off special pricing. Whether they do this on purpose of if it is truly a computer error doesn’t matter.
Automatic bill pay is a great thing for paying bills on time (I won’t get into how doing so helps us live in a payment plan society however). I encourage it for many people who have a hard time paying bills on time. But that does not mean you can simply ignore your monthly bills.
If you are going to keep auto paying everything, do yourself and your wallet a favor and review the monthly bills you get. Set up reminders on your phone, calendar or You Need A Budget plan, whatever it takes to remind you to run through them every month.
Taking 20 minutes to review your bills is worth it. Think of it this way: if you take 20 minutes to review your bills and end up saving yourself $50 from erroneous charges or cancelling some services, it is the equivalent of making $150 per hour at a job.
You’d take that job in a heartbeat, right? Well take the 20 minutes and save yourself some money.
Readers, what are your thoughts on this list?