Many banks and utilities offer to automatically charge your checking account or a credit card with the balance due each month. This can be a great time saver and even save you money on stamps, checks, and check fees.

Because the payments are made automatically, they’re never late, so you build a good payment history with no effort. But automated finances can offer their share of headaches, too, and you should consider these before starting to fill out all the paperwork needed to set up automatic payments.

First, unless your bank or utility company is experienced in setting up automatic payments or automatic drafts (withdrawals), you could spend a couple days on the phone with them as they make their attempts each month. In the meantime, you still have to pay by check so you won’t risk marring your credit record. It can sometimes take a whole billing cycle to get you set up, so be certain you understand when the automatic payment will kick in, and keep making your payments by check until then.

Once established, you don’t have to worry about whether the payment will be made, but you do have to stay alert as to what’s happening with your account. If your checking account is being drafted from, write the date of each automatic payment on a calendar and make certain that you record each payment in your checkbook so you have enough funds in the account on that date and don’t bounce checks.

Also keep alert to the amount being taken each month. If it’s a car or student loan, the amount should be the same each month. If it’s a utility, make certain that your bill is correct and that the amount taken matches the figure on your bill. Here’s where big headaches can attack if something goes wrong—since they already have your money because of the automatic payment, it’s more difficult to get your money back if the amount was too high.

If your automatic payment is being charged to a credit card, plan to pay off the balance on the card each month. If you don’t, you’re paying interest on your utility bills or paying double interest on your car or student loan...something you definitely don't want to do!

Weigh the pros and cons and make the choice that's most comfortable for you. Best thing is...you can always cancel and go back to writing checks if you find that you don't like the setup.

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Kathryn Marion is President of Education for Reality™. in Erie, Colorado. Her book Success in the 'Real World:' The Graduate's Complete Guide to Making the Most of Your Career (and Your Life!) was released in April '05 in e-book format for its tenth anniversary--it was distributed through schools, colleges, and universities to nearly two million new graduates. Jam-packed with savvy insights and helpful advicem it covers everything from careers to money management to handling personal and even legal matters. Visit http://www.EducationForReality.com and sign up for the free monthly newsletter, Dose of RealityTM--it will give you a 'dose' of advice on your career, your money, and your life each month as well as point you to additional online resources which will help you in these areas--so you don't have to surf the Net (we do it for you!).

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