I realize what I'm about to say goes against what I perceive to be “conventional wisdom”. When I was Active Duty I earned my Lean Six Sigma Green Belt and I understand, quite well I think, how to become more efficient and eliminate waste. I’m not a fan of having my clients set their bills up for auto-pay, for a couple reasons.
First, if you're not monitoring it you can't manage it. If “extra” credits are added to your bills, or if your spending increases incrementally, you may not notice right away – if at all. This problem is compounded if you're paying your bills via credit card, because at least you're checking account will notify you if it's been over-drafted – assuming you live off a budget and are transferring just what you routinely spend.
I don't buy into the argument that it's going to save you a lot of time; after all – how much time does it really take to pay your bills every month? Speaking for myself, I like to know where my money is going, and it may take me a whole hour (if I'm distracted for 45 minutes) to login to my bank, review my bills and assign the payments from my checking account.
What I've noticed over the years, with clients and seminar attendees across the wealth spectrum, is a rise in individuals who admit they are not sure where all their money is going. Will paying your bills solve this; no, not necessarily. But it will force you to acknowledge, if only for the moment you're transferring the money or writing the check, how much you have spent.
So, next time you hear an efficiency guru recommend automating your life, I recommend thinking twice; and being honest with what it's really saving you. Because, in my opinion, what you're being saved isn't time – it's the sometimes-harsh reality you're spending much more than you would like to admit, and not saving nearly as much as you know you should be.