Autopay is convenient, but taking a hands-off approach to certain bills can be dicey. As a retiree, you’re no longer bringing in a steady income, so you may need to keep a closer watch on your finances than when you were part of the workforce.
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Of course, that doesn’t mean putting some — or even many — bills on autopay is a bad idea. While you should always monitor money coming in and out of your account, setting some bills to autopay can be a good idea, because it’s one less thing to remember.
GOBankingRates spoke with two financial advisors to learn which bills are right for autopay and which might be best to pay manually. Keep reading to find out what they had to say.
Credit Card
“By reviewing the total bill and the transaction list on each bill, you can see if anything looks strange,” said Justin Pritchard, CFP, founder of Approach Financial. “Then, you have time to address problems before making a payment.”
If anything appears off, Pritchard said you can contact the biller to request a correction, or dispute charges with your credit card issuer. While you shouldn’t put your credit card on autopay, he does support putting other bills on autopay through your credit card to make life easier.
“Instead of having those bills hit your bank account immediately, the credit card acts as a buffer between billers and your checking account,” he said. “But you should be in control of making the credit card payment.”
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Utilities
Setting utility bills to autopay can be risky, Pritchard noted. “My utility company lets me set a maximum dollar limit for autopay transactions, so it goes through every month unless something strange happens,” he said.
You could try the maximum dollar approach, or simply not set these bills to autopay at all. If they’re paid automatically, you might not notice any irregularly high charges, which could be a mistake, or indicate there’s an issue in your home that needs to be repaired.
The Case for Autopay
Putting bills on autopay is undeniably easier, as it eliminates any chance of missing a due date. Pritchard said he supports putting a lot of bills on autopay through your credit card, and Noah Damsky, CFA, principal at Marina Wealth Advisors, agreed with the autopay approach.
“Retirees should put all bills on autopay,” Damsky said. “The tricky part is keeping everything organized, so it’s easy to spot unnecessary expenses and cancel them promptly.” However, he also noted that’s easy to do while still having bills set to autopay.
“Maintain all autopay expenses on a single autopay-only credit card or bank account,” he suggested. “This way, they’re organized and easy to track, ensuring you can regularly monitor your expenses.”
If you’re paying close attention to these expenses, he said you might even find ways to cut back.
“If you keep them organized this way, you can easily spot bills and services that you no longer need,” Damsky said. “Follow this strategy and you can pay all of your bills with minimal effort and ensure you’re not wasting money with autopay expenses that typically slip through the cracks with a lack of organization.”
In addition to potentially saving money, Damsky pointed out there are plenty of other benefits to putting bills on autopay. “For retirees, this strategy is critical to maintaining strong financial habits as we prepare for potential declining cognitive abilities,” he said. “Maintaining organized spending accounts can also help to identify potentially fraudulent activity promptly.”
When you know what you’re usually spending, any irregular activity will stand out, making it easier to promptly address the situation.
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This article originally appeared on GOBankingRates.com: 2 Bills Retirees Should Never Put on Autopay
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