We're guessing that paying your bills isn't high on your list of favorite tasks. However, rushing through it or putting bills off can cost you — big!
Here are six mistakes you may be making when it's time to pay your bills and what you can do to make the bill-paying experience more pleasant/less stressful.
1. You're paying bills late
This is no secret. Paying your bills after their due dates can hit your finances hard. Late payments lead to late fees and can potentially damage your credit score, which can drive up the interest rates you pay on everything from credit cards to your mortgage. A higher interest rate on your mortgage can cost you thousands of dollars over time.
So if you frequently miss due dates:
- Keep track of your due dates in a calendar or spreadsheet you check frequently, or set a reminder on your smartphone.
- Check to see if your billers can change their due dates so all your bills are due at the same time. When you have a number of bills due at different times of the month, staying on top of what's due when can be tricky. One due date to remember can keep you out of trouble.
- Schedule bill-paying into your calendar and stick to it! It can be once a month, once a week...whatever works for the bills you have.
- Look into automating bill payments. Especially if you have bills where late payments can be reported to credit bureaus, scheduling auto-pay to cover minimum payments will save you from late fees and a credit score ding. Automate payments for bills that don't fluctuate, like your auto insurance or student loan payments, so you're not surprised by a higher payment than usual.
2. You're paying incorrect amounts
Always double-check your bill for the correct payment amount to avoid over- or underpaying a bill. Underpaying a bill can cost you late fees and possibly ding your credit. And if you've ever over-paid a bill, it will take time to get your money returned to you, which can be a hardship if you're on a tight budget or struggling financially.
3. You're paying the wrong bill
Make sure you are paying the correct company or service provider to avoid having your payment go to the wrong place. If you have two or more accounts at one company — a car loan and a mortgage payment, for example — make sure your payment gets credited to the correct account by including the account number with your payment.
4. You're not keeping track of payments
There's a Chinese proverb that says, "The faintest pencil is better than the sharpest memory." Not keeping a record of payments can lead to missed or duplicated payments. A written record helps to avoid these mistakes. Your check register, a spreadsheet, or your payments written down a dedicated notebook will suffice.
5. You're not examining your bills
Taking the time to read through bills and thoroughly understand what you're paying for will ensure you're being accurately charged. When you're not reviewing your bills regularly, you might miss mistakes that could be caught and disputed. Your billers may even raise prices without you realizing it!
We're aware of a member who was paying her credit card bills in full without checking the charges. Many months later when she looked more closely at her bills, she spotted a large fraudulent charge. By the time she noticed it, however, her card issuer told her it was too late to open a dispute and get her money back. She lost several hundred dollars as a result.
Keep in mind that your bills may also contain time-sensitive promotions and opportunities for discounts; you'll miss out on them if you're not reading your bills thoroughly.
6. You're awash in paper
Bills, bills, bills! It's easy to let them pile up and then have to dig through a pile looking for the right bill to pay. Instead, consider going digital with your bills. Many billers have apps that accept payments or will let you pay through their websites. At Hanscom FCU, you can have bills sent directly to your Bill Pay in Online Access, where you can view the invoice and get an alert when payment is due.
As we mentioned above, you can schedule payments so you're never late. Scheduling bills to be paid by their due dates will give you peace of mind and it takes minimal effort. As a bonus, when you use bill pay, you'll have a record of your payments you can refer to in the future.
Do you have any tips for avoiding bill-paying mistakes? Add them below!
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