Say Bye to Late Fees Forever With These 7 Helpful Hacks
Bills are one of those forever expenses in life and they'll always be waiting for you at the end of each month. Between utilities, rent/mortgage, credit cards and loans, it's easy to lose track. Even one missed payment can mean late fees, increased interest rates, service disruption and even worse, a damaged credit score.
Here are the practical hacks you can start using today to pay bills on time and avoid late fees for life.
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1. Organize Your Monthly Bills
It's easy to miss payments if you don't keep track of all your bills. That's why taking stock of all your monthly bills is the first thing you should do. Review your credit card and bank statements to find the payment amount for bills like rent or mortgage, utilities, loans, credit cards, insurance and subscriptions.
Record the bills on a budgeting app, a spreadsheet or any method that will help you stay organized. For each bill, note down the company, amount, due date and the payment method.
2. Prioritize Essential Bills First
Life happens and there may come a time when you can't afford to pay all your bills on time. For this reason, it's crucial to prioritize bills by importance and due dates. Using the list you created above, sort your bills into high and low priority.
High-priority bills are those that will affect your day-to-day life if you miss paying them. This includes essentials like utilities, rent/mortgage and insurance. For lower-priority bills, don't be afraid to communicate with creditors if you're facing temporary financial difficulties.
3. Create a Bill Payment Schedule
Not all bills are due on the same day, so it's easy to miss payments. Creating a payment schedule can help avoid late fees. Go through your bill record and group them by due date. It's always a good idea to add the due dates to your calendar or set reminders using a bill tracking app.
You can align your payment schedule with your paycheck cycle. Some creditors let you change your regular due dates, so don't be afraid to ask if you want to streamline everything.
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4. Automate Payments
One of the best hacks to avoid late fees is to set up automatic payments. Most creditors, utility companies and subscription services offer automatic payment options that deduct money directly from your bank account on the due date.
However, it's important to make sure you always have enough money in your account to cover these payments. Otherwise, your bank will charge you overdraft fees. Always keep a buffer in your checking account at all times, so even if your balance runs low, you don't miss paying your bills.
5. Talk To Creditors Before You Miss a Payment
If you know you'll likely miss paying a bill, don't wait until it's overdue. Contact the creditor and explain your situation. Many companies offer grace periods or payment plans that help avoid late fees. Being proactive shows responsibility and if you've built a history of paying on time, they're often willing to work with you.
6. Take Advantage of Tech
With the help of tools from your bank or creditors, you can stay on top of your bills. Sign up for reminders when due dates approach or alerts when your balance dips below a specific threshold. You can also leverage bill tracking apps like Monarch, PocketGuard or FreeBudget, among others, to track all your bills in one place.
7. Have a Safety Net in Case of an Emergency
Having a financial cushion can help avoid missing bill payments or taking on debt in case of unexpected expenses, such as medical bills or urgent car repairs arise. Many financial experts recommend having an emergency fund that can cover three to six months of living expenses.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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