I was looking at my electricity bill the other day and something caught my attention [Yes, I do look at my bills every month and in general if there is something that talks about saving money, it gets my attention] There is a difference of $2.5 depending on the option you choose for billing (see the image below for the available options) – say if the bill is $100, it’s 2.5% cashback, which is more than most of credit cards provide; it’s even more cashback in winter when the electricity bill is lower (assuming the heating uses gas).
That was an example of how you could save money by autopay, which works well for necessities such as utility bills. I still have reminders in my calendar just to track when the payment is due, but not having to worry about opening the computer -> going to the website -> looking up for logon info in Keepass -> entering the credit card or bank account number -> paying -> shutting down computer is great! Considering on an average of 5 – 6 bills every month and if each one takes 5 – 10 mins of your time, it’s a waste of almost an hour that you could spend watching “Stranger Things” on Netflix.
According to one statistic about 61% of Americans have at least one bill on autopay, which is great but what about the payments for discretionary items. Should we still set it to pay automatically? That’s the question we’re trying to answer. Tell me if any of the following sound familiar:
- Only exercise you get from your gym membership is thought of going back someday, when you see the monthly charge on your card
- You keep getting Rolling Stones in your mail and use it as mouse-pad
- You hardly order anything from Amazon anymore, but continue to have prime membership thinking you may need something urgently that’s only available on Amazon and free 2-day shipping is the only way to get it
You think about canceling the service next month, which turns into next month again then you move and the next person who rents the apartment gets to use those magazines as napkin. Where does it end?! Right there when you cancel the auto payment. I recently let go of my Amazon Prime membership and few others that I was still using but didn’t value anymore. It may not sound too much per month, but that’s the trick they play to make it sound less. That $19.99 membership doesn’t sound a lot until you calculate the yearly cost which is $239.88 and now all of a sudden you can afford the JLo concert you always wanted to go to! [not saying you should spend the savings, in fact investing is a better option, but at least now you got more options]
Also when you don’t care about certain specific things anymore but still like to use it sometimes, that $9.99 Spotify subscription for example, you can always look for cheaper alternative. Like most of the thinks in life, automating payments can help or hurt depending on how you use it. My advice: use it wisely!