I have a very tight budget and one late fee will send the whole thing out of whack. Suddenly I am gasping for air because not only do I have to pay the regular bills, but now there is an extra chunk of change that I have to produce to keep using the lights. I finally got sick of the run-around and set up a system that keeps me from ever having a late fee again. There are better things for me to spend my money on than that foolishness.
Make a list of your bills
Just take a notepad and start writing down a list of bills: Cell Phone, Electric, Gas, Netflix, Etc. Once you have a list you can start making sure that each bill is planned for ahead of time. Don’t forget those sneaky once-a-year bills for subscriptions and memberships as well. Those add up quickly and their late fees will result in a hefty charge and take away access to much needed resources.
Set up a Bill Pay Account
I have 7 accounts at several different banks, but my most used account is my bill pay account. I set up a checking account strictly for paying bills. Each month I put enough in the account to cover the bills so that I don’t ‘accidentally’ spend the money on something else. Always keep about a $100 cushion in the account as well in case one month you end up having an unexpected bill come up.
Make sure to plan ahead for those annual fees that come up. I always put an extra $10 each month into my bill pay account since I know that each March my Amazon Prime membership comes out of my bill pay account on auto-pay. That way I don’t freak out when February comes around and I am wondering where I can get an extra $100 for my year’s subscription.
Auto-Pay is your friend
I love my cell phone, insurance, and internet bills because they automatically come out of my checking account each month. Since I have a pre-pay phone plan, it costs me $45 flat fee each month. My internet and insurance are the same amount each month as well so I always know how much will be coming out on what date. I just have to make sure that I have the money to cover it in my bill pay account.
I encourage you, any bill that you pay the same amount on each month, set up auto-pay. I am especially bad about forgetting to pay something if I don’t have it in front of me and was ending up paying the company’s salary with my late fees. I scheduled one day where I called all the companies I was always late with, and asked if they had auto-pay. Three of the companies actually gave me a discount on my monthly bill since I went to auto-pay. It’s only a few dollars here and there, but it adds up, and I don’t have to worry about late fees.
Set up ePay
9 out of 10 banks have ePay now where you can pay your bills from your bank’s website. I was very leery of this at first, but now, it is my favorite way of paying any bill that changes amounts each month. I have one day that I mark each month just to do my bills. Once a month, that is it! I enter in the bill amount into my ePay window and select what date I want it paid. That’s it! The money is paid to the company on that date and is never late.
The first time you do ePay you will have to enter in your company info, the name of the company, account info, etc. After the first time, you just type in the amount, select the date you want to pay and click “Schedule Payment”. It takes me 5 minutes each month to pay all my bills and I never see a late fee charge on my bill.
Ask for a pass
Oops, you goofed up. You missed scheduling one bill and there is a glaring late fee charge on your bill for next month. What to do now? Well, if you are always good about paying on time, why not ask them if they can waive it? The worst they can say is no, right?
A few months ago, I completely forgot about my internet bill, which resulted in a very steep fee. I was so embarrassed that I wanted to just pay it and make it go away. Instead I called the company and got a lady who could barely speak English. I explained what had happened and asked if it was possible to get the fee waived since it was my first offense. I don’t know if she was in a good mood, or if it was just talking to someone who was polite on the phone. She not only waived the fee, but helped me get a rate for less than 1/2 of what I was paying. I made sure to set up auto-pay on that same phone call so the late fees wouldn’t happen again.
See if there’s a better way
Did you know that some companies offer a budget rate? I was so glad I stumbled upon this little nugget a few months ago when I called my electric company to ask if they offered something similar. It is where a company (usually an electric or utility company) gives you a set monthly rate to pay rather than one depending on each month’s usage. I had to be a customer of their company for a minimum one year before I could use this option. The company looks over your usage for the year and gives you an average rate. In the winter I would only be paying $20 each month for electric, where as, in the summer I was paying $60-$70. Now instead of trying to budget in a fluctuating rate each month, I pay a solid $43. In the summer it’s much cheaper than usual, and in the winter, higher. Having that constant makes it much easier to budget and plan my finances.
How do you avoid late fees in your financial life?