Thinking of cancelling all direct debits

DullGreyGuy

Postik said:

Anyone else feel the same?

No, the exact opposite... there are a couple of bills (service charge, CPD etc) which I would love to be able to split the cost over 12 months rather than have to pay lump sums but the company  doesnt offer installments and in one case additionally charges an extra amount for paying by SO/DD.

Not going to pay extra, lose out on interest to have to remember to pay on time 

Postik

Interesting, seems like I am certainly in the minority.  Personally I prefer just to get a bill for the whole amount and to settle it there and then, then repeat in 6 or 12 month's time.  I also find that uses less mental energy than thinking of all the DD's that are setup.

I have always been very good at saving, so the idea of having to spread the cost of something over several months rather than just pay it outright has never really appealed.  I know I could be earning interest on the money if paying monthly but we are talking such small amounts it's hardly worth worrying about.

There are certain things that I accept have to be paid for monthly, but where possible I am going to return to paying annually / bi-annually for things like council tax, car tax, water bills, etc

Jami74 said:

What about having a separate account just for direct debits. Work out how much the direct debits come to in a month and then set up a standing order from your main current account to the direct debit account for that amount each a month. It'll seem to your main current account one payment each month instead of a constant drip.

This is a good idea and I have thought about it, although another option I considered what to just make sure there is 12 month's worth of money in the account and forgo the standing order part!

RG2015

I was about to say that I used every direct debit offer that I could. Why do it yourself if someone else will do it for you?

And then I remembered that I cancelled the direct debits for my two regular credit cards and noe pay manually. Even worse, I cannot remember why I did it as I always pay them off by the due date.

I will need to rack my brains to find an answer. Senior moment perhaps? At the moment I think that I will probably reinstate them.

Had I been considering moving them to satisfy a bank DD requirement? Hmm, maybe and they are still available. 

Jami74

Postik said:

I have always been very good at saving, so the idea of having to spread the cost of something over several months rather than just pay it outright has never really appealed.  I know I could be earning interest on the money if paying monthly but we are talking such small amounts it's hardly worth worrying about.

With the bills I pay annually (like car tax, insurances etc) I put the required amount in a savings account each month so it is there to pay the bill in full. So not a direct debit, but still a regular monthly outgoing. 

Years ago, before I really did budgeting, bills would just get paid as and when and it didn't matter because income was higher than outgoings. It was only really after there were kids it became apparent that income was no longer higher than outgoings so I smoothed the monthly outgoings as much as possible (eg by switching council tax to 12 direct debits and putting a set amount each side each month to keep the car on the road), this avoided those 'bad' months when one or two big things needed paying at the same time.

If I had loads of money, there would be no need to smooth the outgoings and I'd probably just pay when billed.

born_again

Brie said:

It's lovely to be in control of things and I quite understand why you might want to change the way you are doing things.  But...

Having DDs set up means you don't need to think about the payments (well not in the same way).  If you get busy, become ill, go on holiday the payments are still made and no one gets cranky at you.  So that's all good.

Some DDs save you money (like getting a discounted utility tariff) and some cost you more (like paying for things like car insurance etc monthly).  And some it doesn't matter (like TV license).

Some organisations will hassle you endlessly if you don't want to use DDs.  Not sure what the council will think if you pay twice at what they will consider random times.  

You could of course switch to standing orders for a number of things.  That way you don't have to think about it all too much, there may be less crankiness and if questioned you can point out that you are acting with integrity.  

Only thing with S/O is that if you forget to cancel. Then it is tough luck. Unlike a DD & the indemnity. Same with changing amounts etc. It is all down to you to do.
As it is you sending the money, not the retailer taking it.

phillw

RG2015 said:

I cannot remember why I did it as I always pay them off by the due date.

I did it once as I thought that I would be more likely to look at the statements to make sure they were right, I didn't and one month I got caught out needing a payment due on the tuesday and I sent it on the friday but because it was a bank holiday it didn't go through in time. I started using direct debits again, it's their problem then & I don't have to think about it.

Now direct debits are worth money, I have as many as I can get.

Richard1212

Postik said:

Anyone else feel the same?

No. One of my Bank accounts is used solely to pay D/Ds and it's all very tidy. Another account deals solely with food shopping and that works well too. I compartmentalise my expenditure, including buying shares, in the same way. There's a lot to be said for having plenty of accounts---either with the same bank or with a number of banks.

FFHillbilly

Postik said:

Anyone else feel the same?

No, I wouldn't dream of paying my bills manually. I value my time and by cancelling direct debits I would be creating work which takes time , and also losing out on discounts. and for what?

km1500

such a First World problem ...

Rob5342

I have a spreadsheet with all my direct debits in that tots up the total. Any time I get a variation I enter it in the spreadsheet, then when I get paid I put that much into my Monzo bills pot. All the direct debits get paid from the pot so I can manage the rest of my money as if they didn't exist. Obviously I keep aware of them and change suppliers every year to get the best dealz but on a day to day basis I don't have to think about them.