What is everyone's thoughts on having your bank withdraw money from your check weekly to pay a bill. In other words I have a signature loan and they withdraw 20 dollars from each check to put it toward the loan. It is almost hardly missed, and I looked at my loan recently and was surprised at how little I owe now.

I have a credit card with them owing about 2,000 on it and was thinking of doing the same thing with it. What is your thoughts? Pro/Cons?

  • by check, do you mean "checking account" or do you mean with each check you write, they withdrawal an extra $20. I've heard of banks rounding up each debit card bill to the nearest dollar with the extra going into a savings account.
    – mkennedy
    Jul 1 '17 at 0:58
  • I think he meant pay check. Jul 1 '17 at 1:53
  • Withdraw money from a paycheck?
    – RonJohn
    Jul 1 '17 at 2:36
  • 1
    I have a credit card with them owing about 2,000 on it Who is "them" that owes money on your credit card?
    – RonJohn
    Jul 1 '17 at 2:37
  • 2
    It appears he has a paycheck, direct deposited to his bank account. His bank offers a service, to take a regular withdrawal from that check, and apply it to the credit card the same bank issues. In effect, no different than any automated payment although the implication is that the deposit itself triggers the card payment. Jul 1 '17 at 11:56

You could of course do the same yourself, but it is often tough to keep the discipline, and sometimes it gets really forgotten. Only you can say if you would be disciplined enough... Otherwise, it is a useful help, and it is free, so why not. There are no disadvantages.

  • Yeah, I used to be real disciplined and never forget but once I started working 12 hr night shifts, I do not even know what day it is most of the time.
    – homer
    Jul 1 '17 at 1:00

While I know some people prefer handling things more "manually", I really like automating everything possible. To the greatest extent possible, my deposits automatically go into my Checking account and my bills automatically withdraw from it. That way, I never have to worry about accidentally paying a bill late, and my financial life just runs mostly on its own.

There are a couple things to be wary of when automating one's financial life:

  • You need to have a firm enough grasp of your budget so that you know that you are spending less than you make. "If your outgo exceeds your income, your upkeep will be your downfall."
  • You do want to check in on your accounts occasionally to ensure that they're withdrawing the correct amounts that you think they are.
  • The more you automate, the more likely it is that those few bills that for whatever reason can't be automated trip you up and you forget to pay them. I find myself needing to deal with a bill and pay it the first time my hands touch it to ensure I don't forget.

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