How to use auto payments to make life easier, not a wallet

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Like any tool, automatic payment needs to be set up correctly.

What are auto payments and what are they like?

This word has two definitions. In a narrower sense, it is used as a description of a banking service. Many banks allow you to set up automatic debiting of money to pay bills through their website or application. Usually we are talking about mobile communications, the Internet, housing and communal services, fines.

In a broad sense, an auto payment can be called any withdrawal of funds from your account without your direct participation, and it does not matter where it is issued. For example, when you subscribe to a particular service, it periodically withdraws money on its own using the details you specified. This is the same auto payment, even if it is called differently in everyday life, but the essence does not change - you do not need to renew your subscription manually.

There are two types of auto payments:

1. According to the schedule, when a certain amount is debited on a certain date. As a rule, it is fixed, but this is not necessary. For example, in the payment for housing and communal services, a different amount will be indicated each time.
2. On the account balance, when you pay for something not on time, but for the volume of services received. For example, your mobile phone plan assumes that the payment depends on how many seconds or megabytes you spent. In this case, funds are debited from your bank account to your mobile as soon as there are too few of them on the latter. Moreover, it is you who determine the limit at which money is transferred, and how much.

Why do you need auto payments

It's comfortable. Modern man deals with a huge number of accounts and services. To pay for all of them, you need to spend a certain amount of time.

But the most resource-intensive thing is to remember what and when to pay. Sometimes forgetfulness can have consequences. For example, you did not pay on time for the loan - you were charged a penalty, and they can be rather big.

However, auto payments are good not only for paying bills and services. Sometimes you don't even have a choice - this is most often the only form of interaction with the service. Automatic cancellation makes it possible to effectively help those in need. It is very important for charitable organizations to receive albeit small but regular donations. This allows them to plan their activities and avoid situations when there is no money at all. Therefore, a subscription, or setting up auto payments, in this case is a really good way to provide support.

Why auto payments are dangerous

Nothing is perfect in the world, so auto payments also have drawbacks.

You stop controlling costs

Accounting for expenses is important for understanding the structure of expenses, saving and forming a personal budget. When you leave everything at the mercy of automation, you run the risk of not carefully monitoring these costs. And this is necessary so as not to overpay.

You risk paying extra

Automation malfunctions. For example, the recipient's details may change, but money will continue to be debited from you. That is, you will simultaneously send funds to nowhere and accumulate debt to those with whom you have an agreement.

Another option - the service has risen in price, and more money has been debited from your account. If you followed this, you could choose another supplier in a timely manner and not overpay.

Finally, no one is immune to mistakes, including those who bill you. Most likely, after the proceedings, they will recalculate you and everything will be returned. But it's more pleasant to sort it out before you pay, and not later.

And it also happens that you just forget to turn off auto payment. This is especially the case with subscription services. And, most importantly, you will not present anything to the recipient - you yourself are to blame.

You will be charged a commission

This sometimes happens if you set up auto payment through a banking service. Usually we are talking about a small amount. But if you didn't know about the commission, and then found out that it was being charged, it can be frustrating.

How to use auto payments

Set up auto payments for fixed amounts

With some services, everything is simple and straightforward. For example, you pay 450 rubles a month for the Internet. This is the same amount. The operator, as a rule, increases the cost of services not so often and uncritically. So you can connect auto payment and periodically check how much is being debited.

But there are accounts where the numbers are different every time. For example, such are the payments for housing and communal services. The total amount in them depends on many factors, and it is better to check all this manually before payment. Suppose the management company may not take into account the meter readings or suddenly decide that more people live in your apartment than you need. Or you yourself have been away for a long time and want to apply for a recalculation. It is best to clarify everything here before the funds are debited.

Likewise with traffic fines - rarely anyone wants them to be written off by default. Especially if they are drawn up on the basis of the data of photographic cameras, which may be wrong. In such cases, everything should be paid manually.

Recheck for automatics

Make it a rule to set aside a couple of hours every 1-2 weeks to double-check your expenses. This is good not only for auto payments, but now we are talking about them. Double-check your bank statements, see what amounts went where. So you can identify and quickly fix errors in hot pursuit.

Maintain a list of subscriptions

In order not to get confused in auto payments and subscriptions, it would be nice to create a sign in the "cloud" or a list in any suitable application. In it, you should indicate when you activated the auto-debiting of funds and how much is transferred.

This plate will come in handy when you double-check your auto expenditures. And with its help, it will be easy to prioritize and unsubscribe from the less needed if you have to switch to saving mode.

And most importantly: you should definitely add the subscriptions that you connected for the trial period to this list. Almost any service provides 1-3 months for free, but you still have to specify the card details. When the trial period ends, money is withdrawn from your account. To prevent this from happening, you just specify the service in the table. It's also a good idea to set up a notification that will tell you when it's time to unsubscribe.

Check the boxes so as not to subscribe to unnecessary

Surely you have come across a situation when, when buying on the Internet, enter the card data, and the service offers to save them. Moreover, the checkbox is often automatically ticked. If you do not remove it, the information will be saved. Subscriptions are the same, so check the entire page carefully to avoid falling into this trap.