August 24, 2017

The Dangers of Automated Payments

Kittenomics #25

In our modern age of monthly, automated, potentially varying payments, it’s hard to figure out what’s going on with your finances. If you’re not intentional, the amount or number can catch you by surprise after you’ve already paid it.

This kitten understands that automated payments, especially those tied to a debit card, put the collectors in the driver’s seat. Automated payments are the worst kind of “out of sight, out of mind.” Before, she was being overcharged on her utilities without realizing it and spending more than she intended with her cellphone and not knowing. Now, she has turned off automated payments. Now, she knows just how much she spends.

For her, Saturdays are finance days. She updates Quicken, a budgeting software where all of her credit and debit cards’ activity is tracked with one click downloading. She evaluates if any monthly payments can be trimmed while she pays them. She unplugs electrical devices that went unused the week prior. She inspects her kitchen for any old food that can be used. She is in the driver’s seat of her finances.

Way to go, kitten!


How do you track your spending?


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Photo of Daisy taken by Paul Reynolds and used here under Flickr Creative Commons.

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About Megan Russell

Megan Russell+ is the Chief Operating Officer for Marotta Wealth Management. She studied Cognitive Science at the University of Virginia and now specializes in explaining the complexities of economics and finance. Megan loves formal logic, creative writing, and kittens.

Comments

  1. Sweating the Big Stuff just today came out with an article titled 5 Crazy Ways People Waste Money. Number three sound familiar…

    3. Not checking your receipts, invoices, bills, and statements. Every month, I review my transactions online. Why? Because my financial life does depend on it.Sometimes, companies make honest mistakes and accidentally bill you more; other times, they’re actively fleecing you, like AT&T has done to me countless times. Whether it’s a grocery store receipt or a bill at your vacation hotel, check it line by line as soon as possible, and report any errors immediately to a customer service representative.

    And yet the same author wrote an article titled If It’s Not Automatic, It’s Problematic where he writes:

    When you don’t make things automatic, you run the risk of missing your bills, but the main reason to pay manually is so that you check over the bill for any unexpected charges. There are other ways of keeping track of your financial life, I check mint.com regularly so by the time the credit card bill comes around, there aren’t any surprises anyway.

    I like how he walks the line. Automatic payments are okay, but beware the dangers. If you choose to automate, be sure to pay with a credit, rather than debit, card and also to look at the bills around payment time just so you know how much of your money is going where.

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