Senior Living News

No matter how old you get, you never outgrow bills. Paying your bills on time helps keep your credit score high and can prevent you from paying a lot of extra fees. But paying bills can be a tedious and time-consuming task. One solution to make it a little easier is using automatic bill payment services.

How Does Automatic Bill Payment Work?

When you set up automatic bill payments, you agree to have the money for a monthly bill automatically transferred out of your bank account to the company or lender you're paying. You'll choose a date — often the due date for the bill — and the amount you want to pay. Once it's set up, you don't have to do anything else to pay those bills. The money comes out automatically each month.

You can set up these automatic payments through each lender or company. For instance, you can go to your credit card online account and set up the auto pay option. You'll enter your bank account information and other details, such as when you want the payment to occur. Banks also usually let you set up automatic payments through your online bank account. You enter information about the company that should receive the money as well as the amount you want to send and when you want it paid.

Pros of Automatic Bill Payments

Setting up automatic bill payment means you don't have to write checks every month or remember to make an online payment. It's a convenient option for older adults. Some of the perks include:

• No remembering necessary: As you get older, your memory might not be as sharp as it once was. When you set up automatic bill payments, you don't have to remember due dates, and you won't ever forget to pay a bill since it happens automatically.
• Avoiding late fees: Because your payments go through automatically, they won't be late, and you won't have to worry about late fees. If you're on a fixed income as a senior, even small late fees can impact your budget.
• More free time: If you have several bills to pay each month, paying them can be a time-consuming task. Auto pay options free up lots of time since everything happens automatically. You can spend more time enjoying your retirement years with activities like summer gardening or exploring Colorado.
• Credit score boost: If you have credit card payments that you set up on auto pay, always paying them on time can help keep your credit score high. Missed or late payments for credit cards can drop your credit score significantly.
• Less paperwork: When you use auto bill pay, you typically don't receive paper copies of the bills. You also don't have to write checks or send payments. It helps reduce the amount of paperwork you must deal with.

Cons of Automatic Bill Payments

Despite the convenience, auto bill pay comes with some potential drawbacks. Understanding these cons can help you avoid them. Some potential negatives include:

• Potential overdrafts: The payments come out of your account as scheduled whether or not you have enough money to cover them. If you're short on funds, you could face overdraft fees and a negative bank account balance.
• Billing mistakes: While rare, it's possible for glitches to cause mistakes in your bills. Since the payments are automated, you might not look at them closely, so you could miss the mistake. That could result in the wrong amount coming out of your bank account.
• Unnecessary services: It's easy to forget about services when you're paying for them automatically. Maybe you put your gym membership on auto pay but never use it. The payments keep coming out whether or not you use the services, so you could be paying for things you don't use or need.
• Forgetting manual bills: If most of your bills are set up for auto pay, you might forget about the ones you still have to pay manually. This could include things like your car registration that only happen occasionally.

Making Automatic Bill Payments Work for You

Looking at the pros and cons of automatic bill payments can help you decide if it's a good option for you. Here are some tips to make it more effective if you decide to try it:

• Have a cushion in your bank account: The extra money can prevent your account from being overdrawn.
• Know when payments are coming out: While the payments are automatic, that doesn't mean you should forget about them completely. Set reminders for when bills will come out so you know when to expect them.
• Check the auto pay amounts: Look at your online accounts before the automatic payments are set to come out to verify the amount is correct. This gives you time to contact the company if it's not right.
• Understand your options: Review the terms of each auto pay setup to understand how it works. For instance, ask if making an extra payment will affect the next auto pay amount. Find out how you can cancel auto payments if you want to and if you can adjust the amounts.

Another way to simplify your finances is to move into an assisted living community such as Collinwood. You'll enjoy the community amenities included in your monthly costs. Your utilities, cable TV and internet are all included in what you pay to live here, which means you'll have fewer individual bills to pay.