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How to Properly Audit Your Automated Payments

Written by Mint.com
Published Jan 10, 2020 - [Updated Jun 7, 2021]
4 min read
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In 2020, it seems like most of us all have the same subscription services that automatically charge our credit cards or checking accounts every month. You know what I’m talking about: going on Netflix on Thursday night, expecting a package from Amazon Prime on Friday and listening to ad-free music on Spotify while you clean your room on Saturday. As much as these services add value to our everyday lives, we must admit that the automatic charges that come along with these services can definitely creep up on us. Adding on to that, many of us start with these subscriptions through signing up for a free trial and often forget to cancel them. I don’t know about you, but I see that as a recipe for financial disaster!

By definition, setting up an automatic payment means that you don’t have to think about paying it when the due date comes and that makes things convenient for sure, but it creates a problem that most of us are not excited about dealing with. The problem comes when all of these charges add up, it’s easy to lose track of how much you’re actually spending each month. The task of sifting through all your credit cards and checking account charges to find the ones we want to cancel can seem daunting, but you can definitely find ways to make it easy and painless! Here are the two of my simplest ways to go about it:

There’s an app for that!

Did you know that you can download just an app to help you stop wasting money on other apps? I know it sounds funny, but this is such a helpful way to audit because just like your recurring payment, the various apps out there make the auditing process completely automatic! You usually have to be willing to accept the terms and conditions, of course, which includes linking your bank account and allowing the app to look at the data that exists there. Now, this may be a concern for a lot of people because of the issues that can come from granting access to data so make sure you fully trust the company.

Apps can help you tackle organizing your automatic payments and getting rid of the ones you no longer want to pay for so that you can remove those leaks from your budget! If you want to get even more assistance with budgeting and financial planning, opt for a more comprehensive service that also includes reminders about your automatic recurring charges. For example, Mint is a popular option, which allows you to track your bills. It automatically sends reminders when your bill is due and you can even adjust when you receive these reminders or add more. It also sends helpful alerts like when funds are low.

Good Old-Fashioned Paper and Pencil

This is probably a much less popular option for younger generations who are so accustomed to the ease of using online services and apps to digitally handle financial processes and payments, but it’s tried and true!

What you’ll need:

your brain, in work mode

your monthly budget

a printer and paper

a calculator

a pen or pencil and highlighter

access to your credit card statements and bank statements for the past several months

What you’ll do:

To start, you just need to think. Try to recall all the recurring payments that are important, the ones you value and the ones you want to continue paying for.
Make a master list of all the payments that you currently have that you can refer to once you begin auditing.
Print out all your most recent bank statements from your checking account(s), go back at least 12 months so that you can look for things that bill yearly.
Print all your credit card statements for the past year.
Highlight the recurring charges that are paid automatically on each monthly statement. (This is the most time-consuming part!)
On your master list, circle out the ones that you deemed valuable in Step 1 so that they stand out as important.
Any items that are highlighted but not circled are the ones that you should evaluate. These did not come to your mind initially, which means that they probably are not adding a significant enough value to your life.
Add up the total amount you pay in automatic payments and cross-check with your budget to make sure that they are within a reasonable and affordable range given your income and goals.
Finally, log on to your accounts and cancel any services that you found unnecessary

Auditing your automatic payments is something that should be done once or twice a year, at minimum. You may want to consider a few things to make this process even easier. One is to set up all your recurring charges on one credit card. Think about how much harder it would be to audit your charges across several different cards rather than just looking in one place! This is especially helpful for those with multiple credit cards and lots of different monthly charges. Regardless of how you choose to audit your automatic payments, just make sure that you’re being honest with yourself about the value that these subscriptions are adding to your life.