Should I set up my bills for autopay?

The short answer is yes. If you can…

I love to automate the mechanics of bill paying. This is one of my go-to solutions for clients who want help organizing their finances. However…

If you are struggling to pay bills or have irregular income, setting up automatic payments can be problematic. You run a higher risk of overdrawing your account and get hit with bank fees. As an alternative, If you have irregular income such as freelance work, commissions, or small business draws, you could set up one of the following systems to streamline your bill paying.

Automate but Monitor

Go ahead and set up your routine bills for autopay. But then use a personal finance system like Quicken, Mint, or spreadsheets to track when bills are due and the amount due. Use this as a way to anticipate how much money you’ll need in the next week or month and make sure you have the cash to cover those expenses.

Don’t Automate but Monitor

If your income is sporadic and you frequently must pay bills late because the money is simply not there, autopay is not helpful. However, you should still set up a system to anticipate your routine bills – when they are due and the amount. Why do this? Why not just wait for the bills to arrive? Because anticipating your routine bills helps you prioritize which bills you pay first. Maybe all your bills for this month total $2000, but you only have $1500 available. You may need to prioritize paying your electricity bill over your cable bill even though your cable bill is due first.

The bottom line is if your cash flow is good, please set up your bills for autopay. If your cash flow is irregular, you should set up a system that allows you to track your expenses, which allows you to make informed decisions.

Do you have questions about organizing your finances? Leave a note in the comments!


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