Keep Your Eye on Automation

Sep 20, 2023

Are you keeping track of all your financial automation? An incredibly useful tool, automation can help you avoid late or missed payments and make money management more hands off – but it’s not without its risks, especially if you adopt a laissez-faire approach.

When you automate your finances, you may have reduced visibility of your financial situation. You might be less likely to review bank statements or track your spending. If you’re not careful, you may wonder where your funds are going, accidentally overdraw your account or even miss a bill if you don’t notice that a payment failed.

Follow these tips to ensure you’re not blindsided by any financial automation.

Identify Automation in Your Statements

The fastest way to spot automation is to take a look at any recurring charges in your account statements. It’s easy to “set and forget” a subscription service on a credit card, for instance, but you also don’t want to be surprised by an autopay bill that changes from month to month, such as your electricity bill.

Identify your automated charges and transfers, cancel anything you don’t need, and make note of when the remaining corresponding bills are due. Note: the day your account gets charged may not be the exact due date.

Set Up Alerts

One of the best ways to limit the risks of automation is also the simplest. By setting up account alerts, you’ll receive a text, email or other communication every time a bill goes through and money is transferred from your account. This way, you can ensure the bill does get paid, and you won’t be caught unaware by a missed payment or an overdraft.

Honda FCU’s digital banking includes customizable alerts that allow you to designate the specific amount and transaction type from each account to trigger the alerts. For example, you could receive a text for every credit card transaction, but only get a text if your checking account has a transaction over $50.

Change the Due Dates

Some companies allow you to change when a bill is paid or due. If possible, it may be a good idea to move due dates to one or two of the same days every month. That way, it’s much easier to remember when bills are meant to go through, and you could even time it with your paycheck to ensure you always have enough to pay.

Pay Attention When Something Changes

Sometimes, if you make a manual bill payment, it may inadvertently cancel the autopay you have set up. If you find yourself making a specific payment ahead of your autopay, double check your account to see if autopay is still activated and keep an eye on your next statement to make sure the bill is paid.

Additionally, if you close or otherwise change the checking account or credit card you’re using, you’ll need to remember to change the account information for your automated bills as well. This is where the alerts and accounts review from earlier will really come in handy!

Periodically Review Your Automation

Following the above tips will only help for a short while unless you pay attention to your automation. If your circumstances change and you have a month out of the ordinary, you may have to quickly review your setup to ensure everything is in order and you don’t get into any financial trouble.

Sources:

https://www.theverge.com/23608794/personal-finance-automation-how-to

https://www.ridewithloop.com/blog/pros-cons-automating-finances