Supercharge Your Money with Automation

Posted On 19 November 2020

Last updated on April 9th, 2024

For years I resisted the idea of automatic payments. There was something about the whole concept of automatic payments that made me feel like I would not be in control. While working at the electronics store, the phone company gave us the objective of getting people to sign up for automatic payments on their cellular account.

It was during this time that I learned I was not alone in this apprehension about automatic payments. There were a lot of customers that had apprehension about setting up pre-authorized payments. The reasons for not wanting to do this were many. The main reasons customers were reluctant to set up pre-authorized payments included security concerns, a fear of too much changed to their credit card, and the customer not wanting to give the company their credit card information.

In the five years that I worked at the store, there were not many times I saw problems with pre-authorized payments. And every time the problem was on the customer’s side, with the most common being that the customer did not update their credit card information when they got a replacement card.

While I was working with customers and their cellular accounts that I got to see first-hand how beneficial automatic payments can be. Now, several years later, I take advantage of automating my money as much as possible. In this post, I want to share with you why you should automate as much of your money as you can.

Automatically Avoid Late Fees

There are a lot of dumb things I have spent money on over the years. Some people even say that alcohol is a waste of money. At least with alcohol, the wasting is enjoyable! Late fees just suck your money, and there is no benefit to having them in your life.

We are all busy, and we can forget things. When we forget to pay a bill, it is expensive. These late fees can be avoided when we set up automatic payments. These payments can also prevent services from being cut off due to lack of payment.

Speed Up Your Money

Direct deposit is great! Once the money is deposited in your account, you can use it. If you are on vacation, your money gets deposited even if you are out of town. We also don’t have to try to get to the bank and now with the whole pandemic, banks have reduced their hours and we get to stand in line to go into the bank.

Speaking of online banking, e-transfers are a great way to send money to people. I also love depositing checks with the mobile app. Any time of day, or any day of the week I can deposit the check – and I don’t even need to wait in line at the bank!

Boost Your Credit Score

Some companies (like phone companies) do not report good payments to the credit bureaus. They only report the late or missed payments! Automatic payments may not directly improve your credit score, but they can prevent negative marks.

Credit card companies report on-time payments as well as missed payments. When we take advantage of automatic payments our on-time payments can now be reflected on our credit reports.

Pay Yourself First

When we pay ourselves first, we put ourselves in the position to increase our net worth. Just like direct deposit going directly into the bank, why not set up automatic transfers into your savings account? This is a great way to build your Emergency Fund if you don’t already have one.

BMO has a savings account that pays “high interest” if at least $200 per month is deposited into the Savings Builder account. Currently, savings accounts rates are so low now they are almost not worth talking about! Still, a savings account that pays higher interest is a great place to build wealth until that money can be invested and put to better use.

Another way we can pay ourselves first is by using an app like Moka (Affiliate). After you link you banking accounts to Moka, they will round up your purchases and automatically transfer that amount to your Moka account. You can choose to add a multiplier to the round ups to increase that amount deposited to your Moka account.

Reward Yourself – Automatically!

The cherry on the top of this whole strategy of automating our money is with the card that we us to pay our bills. When we use a credit card that rewards us with cash back or travel rewards we are basically paying ourselves while living responsibly.

Automating our money can get us to look at how we use and move our money. We start to look for ways to make our life easier. I am always on the lookout for ways to earn points, miles, or cash-back for the things I need to buy anyway.

Stay in Charge of Your Automation

Something I would have loved to have been able to say to customers, but I might have been fired for saving is, “Just pretend that you are the one responsible.” If we assume that we are responsible for our accounts, life will go smoother! Company reps are so much more willing to work with you if you take this approach.

While it is the company’s responsibility to send the monthly bill to the customer, if the customer has not received a bill in a while, the customer should check and see why. Companies usually notify customers when the card on file is about to expire, or if the payment did not go through. We need to pay attention to notifications from companies. The notifications are for our benefit.

We (the customer) need to actively monitor our accounts. It is our money and our credit score that is at stake. The companies look out for themselves, we need to look out for ourselves – even when we automate our money.