I understand how easy it is to “set-it and forget it” so you never miss a payment. However, in reality, you have set up a system that no one is minding and there are many ways for scams and fraud to sneak into your life.
I have talked with adult children who have either helped mom and dad set this up to avoid missing or late payments, as well as heard from older adults that this is their plan B should they have a crisis.
It seems like a simple solution, but I want you to be forewarned that there are risks associated. Last year I started working with a new client to find that she was still paying for Juno. Yeah, she was paying $9.95 a month for dial-up service, even through she had wifi in her home and had for years. We also found a monthly “shipping service” billing her $24.95 monthly she didn’t use, and several hundred dollars in ongoing charitable contributions she didn’t realize she was making. If you want to set up an auto-debit, do it for an amount that will cover the minimum payment and plan to review the statements before you pay the balance.
In an audit of 20 new clients, I had only one that did’t have a variety of charges on their credit account they couldn’t explain. As we investigate those charges, they realize they were paying for things they don’t use, or worse, never recalled subscribing to ongoing payments.
What’s the harm? Over the course of a year, it’s typically over one thousand dollars. In a few cases this year, I had clients who it was costing several thousands dollars a year. Charities, face creams, supplements, a shipping service, iTunes/App subscriptions … it’s easy to get lost in the list of charges. The scammers are crafty.
I understand wanting to simplify and make things easier, but when it comes to money, you need to make sure someone is minding your finances, or you may find there are several sticky fingers in the till.
If you have a loved one that needs some help, Daily Money Managers are insured and guided by professional ethics to represent their clients best interests. I have yet to find a client where I didn’t save them more money than my time cost. Here is a link to a directory of professionals in the United States. Referred.