How We Designed Our Budget Step 9-Reading Our Bills!

Why you should check all your bills and what to do if you find an error

Does this scenario below sound like you?

You either open the front door, walk to the post box or go to the post office to gather your post…You scan through it all and then you try to avoid the bills but you know you should read them. You proceed to either open it check the total owing and file it or you simply never open it and toss it in the bin,drawer,on top the refrigerator etc.  Is this a big mistake?

You bet it is…It is so important to keep your finances organized and in check!

There’s more to a bill then looking at the total cost of the bill.

For example

When our credit card bill would come in we would have typically opened it and looked at 2 things

1-The Due Date

2- How much we owe

We never gave a second thought to look at ;

1-Where did we spend the money we owe?

2-What did we buy?

3-How much was it going to cost us if we didn’t pay off the bill on time (yep there’s that “time is money” saying without saying it)

We personally like to use credit cards mainly for monthly perks and rarely use cash. If you use cash and save your receipts that is your ticket to all the information you need. You won’t be billed anything further. Good Old saying “Cash is King” stands, I suppose.

Sadly, mistakes can happen when it comes to credit card bills or any bills that you are billed for and have to pay. Over the years I’d like to think that I was diligent in saving money but now realize that I could have potentially saved more if I only was mindful of the numbers. Moving forward I read every bill that comes into my hands including receipts from the shops. Human error is a given, we all make mistakes but so can computers..a simple glitch could cost you.

For example just yesterday we used a “Spend $50 save $10 Coupon” at Shopper’s Drug Mart. The cashier scanned our printed coupon for the discount and it presented on the receipt as “coupon”. When I got home I took out the calculator and did the math. The $10 was in fact Not deducted from the bill. I could have potentially lost $10.

Our money after all is hard-earned and to just dish it out without reading all the details is silly. We are also seeing more and more consumers using their Blackberry or Iphones for mobile banking but take caution by reading the Do’s and Don’t s here before you tech up your finances. Also, check with your bank to see how you are protected.

Terms and Conditions are also very important to read when you sign up for a credit card but also when paying for anything that might have such a disclaimer. When we started to read our credit card bills we noticed what we owe is at the top of the bill and VERY clear

New Balance $540.24

Balance Due $540.24

Minimum Due $10.00 (cough cough choke… is that all, don’t get happy it’s nothing to smile about, crikey that’s like trying to move a mule)

Due Date: April 30,2012

BUT… in 2 spots one at the top the other at the bottom you will read  in tiny wording like on our Canadian Tire MasterCard Bill…………

The Balance Due is the amount you need to pay in order to avoid interest charges on purchases appearing on this statement for the first time. The Minimum Due is the minimum amount you need to pay to avoid your account going into default.”

and….

Repayment Calculation.. (oh ya this is the kicker, you ready for this)

If you make only the minimum payment required each month, it will take you about 4 years and 7 months to repay the balance shown on this statement.. which is ONLY $540.24.…. seriously  are you ready to pay this for 4 bloody years… think about it the next time you swipe the plastic whether you will paying the bill off in full.

Don’t ignore the numbers, they don’t ignore you. This alone should shake up your financial budget and get you thinking about how to pay off a credit card as fast as you can. We always pay our bill in full but for those of you who don’t, read the fine print.

Also,

Every month when bills start arriving we open our CBBBS and match up any receipts we documented and to what credit card. We make sure that every expense on the bill matches what we have on our spreadsheet. You never know if you are billed twice, or any other errors have occurred. Same goes with any bank fees you are charged.

Make sure you can account for all the times that you were charged. If you find a discrepancy contact your financial institutional. How do you know if someone used your credit card to even make one purchase?  Credit Card numbers in my opinion are so easy to get hold of and fraud happens every day around the world.

Credit card

What is Credit Card Fraud?

According the Royal Mounted Police credit card fraud can happen several ways. If your card is lost of stolen a criminal can use that card to manufacture a new card and use it just about anywhere including shopping on-line or over the phone. You can read more here about how to protect yourself.

You may think oh, it’s only $1.00 or $5.00 but if that keeps happening it will all add up. What would you do if you found an extra charge on your bill? You could be using this  money to pay down your debt but only if you catch the errors. If you don’t well its money out the window! Take steps to protect your credit history and always be on the alert for scammers !

Another reason you need to read your bills is to make sure they get paid on time. If you don’t pay your bills on time if you read closely it will tell you they may tack on a nice percentage to the total bill. I remember our first tax bill we messed it up as it was the first we had ever had to pay. They charged us an extra $10 for being late. I was a new home-owner in Canada and still learning the ropes so the City gave me a break. It’s not an excuse but it was the truth so next time I planned to be informed and ready rather than having to explain myself.

 Here’s another example of our Hydro Bill:

Our May 2012 Hydro Bill

Total Amount Due: $263.73

Pay by Due Date: May 11,2012

Amount Due AFTER Due Date $267.68

So, if we don’t pay this bill On time we will pay a further $3.95  which is compounded monthly (19.56% per year) 1.5% … Have you read this on your bill or something similar?

At the end of the day we’ve always been told to read before we sign but the same stands before we pay, Always read before you pay!

You can Find Canadian Budget Binder on Facebook HERE or Twitter Here.. it’s a conversation you Don’t want to miss! Mr.CBB

Photo Courtesy of:Copyright (c) <a href=’http://www.123rf.com’>123RF Stock Photos</a>

Mr. CBB
Mr. CBB was born and raised in the United Kingdom who then moved to Canada where he is a permanent resident. He recently became a father to a very busy toddler who allows him to be a kid at heart. He bought his first house at the age of 21 after University and his second at the age of 24. Both Mr.CBB and his wife are Debt and Mortgage Free and they did it all in under 5 years using a Budget. Canadian Budget Binder is a place where he shares their financial experiences with his readers and hopes to learn about theirs. Welcome to CBB!
Mr. CBB
Mr. CBB

Comments

  1. Most people who don’t open their mail are oblivious to their debt. Opening and actually reading your statements allow you to view potential errors and acknowledges the realization that you are spending more than you earn.

    Isn’t it amazing the SMALL minimum payment due each month. The credit card system is designed to keep you in debt…forever.

    • Most people that don’t open their mail are ignoring it because they can’t pay it or are too lazy,simple as that.. You are right the credit card system is designed to keep you in debt forever. It’s too bad some people see it as a lifesaver when I would suggest turning to other options first. Cheers and thanks for your post as always! Mr.CBB

  2. Great tips. I was horrible at putting mail on what could be roughly called a table but what was really a catch all. When I moved, I had a year of unopened mail–and so many late fees or overdraft fees.

    • A year.. wow.. that’s crazy but glad to know that you recognized the danger of doing that and the cost for that matter.. no one likes mail unless it’s a cheque or some really great coupons or deals! Thanks for popping in and commenting.. Cheers Mr.CBB

  3. I always check my bills before I make my payments…gotta watch every penny these days. Great post!

  4. Great post. If you don’t watch your money, no one is going to do it for you.

  5. Wendy LeDrew says:

    thanks for the great post, and tips:) I never use to pay much attention to my bills, either than look at the date, and amount, and pay them. Now I try to ready everything.

    • that’s essentially what we used to do and we realize that was a big mistake. IF I can urge everyone to take a minute and read anything that someone wants you to give money for than I am doing it now! Cheers Wendy for your comments, always appreciated. Mr.CBB

  6. Very good information, because I have a home daycare I need to keep track of all receipts and always check them, to make sure theres no errors and pay all credit on TIME :))

  7. Linda Leroux says:

    Thanks Mr. CBB for that information…….opened my eyes to a lot of new things to look for on my bills…….Great information!

  8. I ALWAYS check my bills very carefully!!! I actually get a knot in my stomach when the Bell bill comes because I have to call them for errors almost every month! I even look over my chequing acct to make sure those are all legit transactions to make sure nobody has hacked my acct.

    • Well it sounds like you have a system in place. Too bad you have to call Bell every month. I’m usually that way with Rogers after I renegotiate it takes about 3-4 months to sort it out every year. I also linked to a post that you might like it was about using your cell phone to pay for your bills etc.. did you happen to read it? Mr.CBB

  9. Linda H. says:

    Thanks for the post. I’m usually pretty good at examining my bills. There is one I examine with a fine tooth comb as it is usually incorrect most months. You posted about your credit card bill and how many years it would take to repay just makiing minimum payments. Well I just looked at mine, I won’t tell you what I owe (it’s just too sad) but if I make the minimum payments it will take me 85 years and 5 months…I’ll be long gone before then…lol.

    • You never know Linda what will happen between now and then, keep the faith and it is possible to get out of debt.. make a budget and stick to it until the end! Cheers and thanks for commenting Linda! Mr.CBB

  10. Angie Hall says:

    Thanks for another great post Mr.CBB,I normally don’t go over my receipts but maybe it’s time I started eh!

  11. Dani Ray says:

    I always go through my bills to make sure I wasn’t charged anything extra!

  12. Joanna Cheevers says:

    Thanks once again for the great tips. I have always been one to examine my bills carefully. The same advice can be used towards bank statements. Last year I had written a cheque that when came out of my account was for more than I had written it for (caught the error on my statement). Called the bank to inquire, was informed that if I was in error I would have to pay a fee for checking it out. Sure enough it was an entry error which was quickly corrected and didn’t cost me anything as it was the banks error.

    • That’s true, anything that you have to pay for ‘read’ and read again if necessary. I hate to imagine the amount of potential money people are loosing due to errors like the one you described and some of the ones I have. Thanks for your comments as always Joanna! Mr.CBB

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