Tag Archives: bills

Are You an Ostrich?

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Ignoring a problem doesn’t make it go away.  Let me repeat that.  IGNORING A PROBLEM DOESN’T MAKE IT GO AWAY.

When something is troublesome to you, it’s easy to procrastinate.  If you stick your head in the sand like an ostrich, you don’t see the thing that needs to be addressed.  And you feel like it goes away.  But it doesn’t.

That room that needs to be cleaned will still need to be cleaned even if you have shut the door.  That empty pantry won’t magically fill itself if you Door Dash for a few days.  That exam you are dreading will still happen, whether you prepare or not.  And unpaid bills will remain unpaid and possibly turn into a much uglier situation if you don’t make payment.

Unpaid bills are likely the worst thing to procrastinate on. There are all sorts of consequences.  And none of them are easy to bounce back from.  Late on your credit card payment? Not only will you be charged a late fee, you will likely be looking at a higher interest rate on the next month’s bill.  Late on an insurance payment?  You may find yourself uninsured when you need insurance the most (such as an accident or major illness).  Late on a utility bill?  The utility could be turned off.  Late on a car payment?  You could end up dealing with the repo man.  Late on rent?  That could eventually get you evicted.  And any of these things will also have a negative impact on your credit report, which will make your life more difficult going forward.  Good credit is necessary for things like signing a lease, getting a loan (yes…even a Grad PLUS or private educational loan), getting a credit card, or getting insurance.  And really bad credit history can cause struggles with the character and fitness check for the bar exam.

If you are facing a troublesome situation, it’s best to tackle it head on. Admit to yourself that you’ve gotten yourself into a sticky spot, and do what you can to fix it.  Messy room?  Clean it a little bit each day.  Empty pantry? Place an online order for pick up and get some groceries.  Dreaded exam?  Get to outlining! No money to pay a bill?  Reach out to the creditor to see if they can work with you.  Almost every problem has a solution.  If you can’t find it yourself, ask for help.

Ignoring a problem doesn’t make it go away. Don’t be an ostrich.

Late Bills Prompt Money Dates

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I haven’t been prioritizing my to do list in the way I should.  When life becomes overwhelming (as happens more often than any of us would like), it’s easy to lose track of what should be happening when, and things fall by the wayside.  My “weekly” Moneywise Tip has been one of the things that has fallen to the wayside.  And I need to do better.  Fall semester has been a whirlwind for me.  Long weekends planned long in advance, care of my elderly mother, home repairs, law school reunification activities, purchase and repair of a 20-year-old camper van (sure to factor into many future adventures!), and a presidential election that sucked all the oxygen out of the news cycle for way too many months have all pulled my attention away from writing.  And that needs to be fixed.  Starting now.

It’s not just the Moneywise Tip.  I’m behind on absolutely everything.  My house needs to be cleaned.  I need to do some repairs in my bathroom.  My cats need vaccinations.  I need to submit claims to my mom’s health insurance company.  And I haven’t even taken the time to manage my own finances.  I knew it had gotten bad when I e-paid my electric bill from a camping trip because it was coming due in a couple of days and I remembered I hadn’t paid it yet.  I didn’t have the bill with me, but I just submitted the request to pay an amount that I knew was more than the amount I owed.  But I hit an all-time low for myself last week when I looked at my natural gas bill and discovered it was due that day.  I immediately e-paid it, but the payment definitely was arriving late.  This likely won’t take a toll on my credit rating because the payment will be received only a couple of days late and this is abnormal for me with a decades long history of paying things on time.  But it’s a wake-up call.  I need to start paying more attention to my priorities.

I’m very overdue for a “money date” with myself.  Every so often it is important to take a couple of hours and sit down to look at your finances.  How much have you been spending on what?  Are you within your budget, or is it time to evaluate your budget categories? Are you meeting your savings goals?  Have you been paying down your debt in a way that makes sense? Do you have a plan for bill paying that makes sure everything is paid on time?  Ideally a money date should happen with regular frequency.  Once a month. Or at least once every few months.

I know that the end of the semester is a very busy time for law students.  Outlines and briefs and papers and studying tend to take priority over things like self-care and personal finance.  But it is still important to make sure not to forget completely about the other priorities.  Learn from my mistakes.  Pay your bills on time.  And when the semester ends, it’s a great time to have a money date with yourself.

Putting your Money on Autopilot

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Routines are a good thing.  When something is routine for you it almost runs on automatic pilot.  You don’t have to expend the energy to remember it.  It just happens.  I brush my teeth before bed.  I feed my cats first thing when I get up in the morning.  I set up the coffeemaker for the next day right after I wash the dinner dishes.  I don’t think about these things.  I just do it because it’s routine.

This semester I’ve found myself needing to establish new routines.  And that’s not always easy. I have to remember to grab a mask before I leave the house.  I have a new travel mug that I’m using for my morning coffee (because it allows me to use a straw I can slip under my mask) and I haven’t adjusted to exactly how much to fill it so it doesn’t splash over when I put the lid on.  I’m getting used to being back in the office after working from home for an extended period which is good (my computer monitors are so BIG!) and bad (traffic in State College isn’t horrible, but it’s much worse than the commute from my living room to my guest room) and good (I get to see STUDENTS!!!) and bad (with the combination of my glasses, my mask, and my headphones for Zooming, I feel like I’m wearing a motorcycle helmet all day).

Experts say that it takes 66 days to develop a habit.  That’s the magic point at which your routine goes on autopilot.  Which explains why I’m struggling with returning to the office after working at home for 17 months.  My work from home routine was on autopilot.  And it’s not easy to build new routines.  You need to focus on doing the same thing at the same time on a regular basis (whether that’s daily or weekly or monthly).

You are likely also working on establishing new routines.  A new class schedule.  A new commute.  And quite possibly a new way of managing your money.  All of these things are much easier to manage once they are routine.  So how do you make managing your money routine?  Last week we talked about putting your “monthly paycheck” on auto-transfer.  That’s the first step.  But you can also set up a lot of your bills for auto-transfer.  And any bills that are not on auto-transfer you should establish a routine for when you pay them.  I always sit down with a pile of bills at the start of every month, right after I get paid.  I schedule all the payments with my bank’s online bill paying system, and then I’m done for the month.  Autopilot.  And I do the same with savings.  I have auto-transfers set up to move money into my emergency fund and my long-term investment account at the beginning of the month.  And my retirement savings comes right out of my paycheck before I even see the money—it doesn’t get more automatic than that!  And my final money routine is to check my recent transactions every morning when I sit down at the computer.  I subscribe to a service that imports all of the transactions on my different accounts into a Google spreadsheet, which allows me to better track where my money is going.  The daily sorting and categorizing of these transactions helps me to manage my budget and alerts me to anything that may be out of the ordinary (hopefully “What did my husband buy at the music store now?” rather than “My credit card has been hacked!”).

While you are working on establishing your new routines, make the extra effort to put your money on autopilot too.  It really can remove a great deal of stress from your life not to need to think about it!

 

Paying the Bills: Auto-debit and online bill payment

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I hate paying bills.  I guess everyone does.  But I don’t hate it near as much now as I did a decade or so ago.  And it has nothing to do with having enough money to cover everything.  That’s still a challenge.  It has everything to do with the Internet and automation.

There was a time when bill paying meant sitting down with a checkbook, a pen, and some stamps.  I’d write out checks and get them in the mail with enough time for them to get to their destination before the due date.  On rare occasions I would send a check that I didn’t have quite enough money to cover and hope that a deposit went through before the check was cashed (DON’T DO THIS!!!!!).  Sometimes there would be a mail failure and a check wouldn’t get there on time (or at all), leaving me on the phone with customer service representatives trying to sort it all out.

paying-bills

Today bill paying for me involves my computer (or my smart phone) and several auto-payments.  Several regular bills (my mortgage, my car payment, my car insurance) I have auto-debited from my checking account every month.  Several others (my cell phone, my online newspaper subscription, my Netflix account) I have billed right to my credit card.  The rest I pay online with my credit union’s online bill payment feature.  The funds move electronically in most cases, so I know that when I sit down tonight to schedule payment to my Visa card, the bill will be paid tomorrow.

As with everything, there are pros and cons to auto-debit and to online bill payment.  If you don’t have regular income, auto-debit can be a little scary as the creditor will attempt to deduct the money whether it’s in your account or not, and that could result in an overdraft for you.  But in most cases auto-debit is a win-win.  You never have to worry about taking action to make a payment, you know your payment will always be on time, and the creditor is happy because your payment will always be on time.  Some places (student loan servicers in particular) will even lower your interest rate on a debt if you sign up for auto-debit.

Online bill pay requires a little effort on your part to set up.  If you don’t enter your information correctly, your payment may end up in the wrong place.  And your bank may charge you for this service (though I encourage you to look around for a bank that doesn’t!).  But once you have everything set up, paying the monthly bills is a snap.  You sit down at the computer, enter the right amounts and desired payment dates next to the bills, and you’re done.  No checks.  No stamps.  No mail mishaps.

Paying bills is never anyone’s idea of a good time.  But it sure could be a lot worse!