Last Updated on by Bree
Do you have automated payments coming out of your bank account for subscriptions, memberships, and other services?
If so, you’re not alone.
Automated payments can be a great way to keep up with your bills.
But they can quickly wreak havoc on your budget if you’re not careful.
In this post, we’ll discuss how to keep your automated payments from causing you budgeting headaches.
5 Steps To Stop Automated Payments System From Ruining Your Budget
1. Make sure the subscription is a necessity, not a want
If you must get a subscription that requires monthly payments, ensure it is a necessity, not a want.
Monthly utility bills like the internet, water, sewage, and electricity can be put on automatic payments.
But things like game coins are not serious necessities; they want.
So you can’t have your card tied to such subscriptions.
It can seriously destroy your budget and knock you off balance.
So set your priorities right.
You may also love 8 Tips To Control Impulsive Spending From Ruining Your Life.
2. Set a reminder to stop automated payments before or by the end of a free trial
You know those subscriptions that are just so enticing, and you can’t wait to try them?
And they also have a free trial period of 7days or sometimes 30days, but you have to enter your card details.
I hope you know that when your free trial is over, your card will be charged.
And this may surprise you because you were enjoying the free trial and forgot yourself.
So in order to stop this automated payment from destroying your budget, set a reminder for the subscription end date.
My husband did that when using a free trial for the Pandora Music app.
Once it is time, you will get a reminder from your calendar; then, you can deactivate the account or turn off auto-renewal.
Make sure to remove your card details too.
Because there is no refund once the money has been taken from your account.
It is so weird that you only remember days after your card has been charged or, even worse, when you receive your bank statement.
And then it may be too late to make a case (unless you are lucky).
That means you will be forced to use the paid version of that service while your budget has been knocked off balance.
3. To stop automated payments from wrecking your budget, pay your subscriptions annually
If you are using a subscription service that is very important and you cannot afford any interruptions, pay for a year if your budget allows it.
My cousin taught me this step.
He pays for a year of internet and other things he can’t afford to miss.
Then he won’t have to worry about paying them for a year.
I actually like this because it helps you set your priorities right when doing your budget.
And also save any extra money towards the next yearly payments.
4. Do not allow overdraft on your bank account
Another practical step to stop automated payments from destroying your budget is disabling overdrafts on your bank account.
Overdraft is when you can still get money from your bank even when your account is empty.
And if that bank account is connected to any monthly subscription service, the company can still charge your account.
When this happens, you would be owing to the bank money that you did not plan to spend.
The worst is when you are unaware of a minus on your account balance.
Then the bank would add interest to that overdraft spent over a period of time.
Tell me how sick is that.
5. Use debit instead of credit cards for automated payments
Lastly, using a debit card can help stop automatic payments from ruining your budget.
Using your debit card for automated payments is ideal because it cannot be charged if your bank account is empty.
But if you use a credit card, there will always be money for the subscription company to take from you.
As I said about the overdraft, the company cannot charge your debit card if you disable the overdraft.
So your debit card is a better option in this case.
However, some companies do not accept debit cards for monthly subscription auto-renewal payments.
I like to think it is because there is a chance that your account balance might be too low, but you may or always have money on your credit card.
You see, these guys are smart.
They will get their money when it is due, whether you are ready or not.
How To Stop Automated Payments System From Ruining Your Budget
To stop automated payments from destroying your budget;
- Ensure that subscription is necessary.
- Set a reminder to stop automated payments after trial periods.
- Pay for important subscriptions for at least a year and forget about it.
- Disable overdraft on your bank account.
- And use a debit card instead of a credit card for automated subscriptions.
I hope this helps you get your budget in order and have no surprise payments or extra credit card debts.
What steps have you taken to stop automated payments from ruining your weekly, monthly, or even yearly budget?
Please share in the comments.
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