I’ll admit up front that I’m a big fan of financial automation. All of my must pay bills are either automatic or at least semi-automatic (I still have to initiate the payment). But just because we can automate, does that me we should automate?
I don’t think it’s an either/or question. Many people, I’m assuming, automate a portion of their finances. If not paying the mortgage or rent is not an option, then why leave it open as optional? I suppose for some households, not paying is an option in the current economic environment.
There’s also a lot of talk about “paying yourself first.” If that’s going to happen, then transferring money automatically from your checking to your savings should be a priority. Saving for me is not a priority right now. Not as much as hammering my debt. So, waiting until the end of the month and saving a little of what remains works for me (I think I just heard a “saving” purist’s head explode).
But, what about other bills? The danger—or risk rather—in automating is not being fully aware of what bills are due or when those bills are due. So, automation, then, isn’t setting everything up and walking away. Automation doesn’t mean automating yourself out of the picture.
There are benefits to the “un-automation” school of thought. First, you’re much more likely to pay attention to how much you’re spending overall. Are there services you signed up for that seemed good at the time but that you no longer use? Maybe you don’t watch as much TV. Or you forgot to stop automatically buying T-Bills in your 401K.
They key to automation is to know what you’ve automated. And to manage and monitor everything a little more closely. And, of course, the key to not automating is to make sure you pay your bills.
Have you had any bad experiences with automating your finances? Have you over automated and caused problems?