I was disappointed by a fluff piece I read over at Foxnews.com. It advertised itself, if I remember correctly, with the blurb "Never pay your bills late again!" Following the link I found many old school tips on how to avoid late fees, mostly amounting to mailing your payment early, but also including such stellar tips as making sure the payment amount is correct.
Now these tips aren't bad, per se. But they don't help me out. You see, I'm absentminded. If I forget I have a payment to make I won't remember to mail it period, nevermind mailing it early. I have created rules and strategies to prevent this sort of thing, but recently I became lazy and have paid the price. I just caused my family a very expensive trip down Bank Fee Lane. I forgot to cancel a charge on our debit card for a service we didn't need. So when the charge arrived the day after rent and the car payment were processed the charge dropped our account into that special place in Hell occupied by idiots and credit card salesmen. I expect they'll have a bunk there ready for me soon. Three transactions quickly followed the forgotten one and you know the rest: Negative balance. I have never caused a nuclear meltdown in my bank account before. That was my wife's department. Oh, I've come close, but we were on top of things and shuffled money about to prevent overdrawing the account. I was careful, but now I can't say that anymore. This puts a crimp in my self-righteous indignation, let me tell you.
I am now immediately dusting off my playbook and putting it into action again. Here's how I avoid late fees. I'll be following up this entry with a report card to see how well I'm doing. I don't like to give advice that I'm not willing to implement in my own life, and to be honest, I feel wretched about the gross waste of money I just caused. If you have ADHD, I recommend implementing these steps. If you have other tricks and methods to help your stay on track financially feel free to share them:
- Lay out all your due dates on a calender in front of you and figure out which paychecks the payments should come from. This is your goal. It may take you a few months and a lot of sacrifice to shift your finances around to the optimum schedule. However, the effort is worth it. This yields a reduction in stress and minimizes the chances of being late. You may have to start with one bill at a time if your finances are bad enough. Persevere.
Sign up for online bill payment with your bank. This may cost a nominal fee. When it comes time to make payments, many banks will simply not process the bill pay payment if there are insufficient funds. This is how my bank used to work but then they discovered they could take advantage of people by treating bill payments as checks and reaping the rewards of overcharge fees. They, too, will occupy that special place in Hell. We stopped using bill pay when our bank gave into the Dark Side to avoid accidental fees and slipped out of our groove, so we are switching to another bank immediately.
Bill Pay services take care of all the addressing, postage, and mailing. Many companies allow direct bank transfers now so payments are instantaneous. If your bill is still old school, you can specify how many days in advance the payment should go out in the mail so that you never miss a payment deadline again.
There is only one hitch. You need to make sure the funds are there by not double spending them. These funds are allocated for the bill payments you scheduled; factor that into your spending. This requires discipline but is not hard to implement.
- Create a bill calendar on paper or on a PDA. My wife likes to have bill dates written into her calendar so she can visually see what has passed and what is coming up. I like to keep track of bills in Quicken and hotsync it with my PDA. All you have to do is develop the habit of checking the calendar and making sure there are enough funds in the bank to clear the Bill Pay payments. Also, get into the habit of looking at upcoming scheduled transactions before spending money out of your account so that you do not dip into your allocated resources.