How We Designed Our Budget Step 9-Reading Our Bills!
Estimated reading time: 7 minutes
Review Your Bills And Handle Errors
I’m unsure why anyone would want to pay for something they did not receive.
I know I sure as heck don’t like giving away free money.
Importance of Reading Your Bills
There’s more to look at when looking at the bill’s total cost.
For example
When our credit card bill arrived, we typically opened it and looked at two things.
- Due date
- How much money we owe
We never gave a second thought to looking at it;
- Where did we spend the money we owe?
- What did we buy?
- Do we have the receipts to back up our purchases as proof?
- 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 use credit cards mainly for monthly perks and rarely use cash.
Suppose you use money and save your receipts.
That is your ticket to all the information you need.
At this point, you won’t be billed anything further.
The good old saying “Cash is King” stands, I suppose.
Sadly, mistakes can happen when it comes to credit card bills or any bills you are billed for and have to pay.
Over the years, I’d like to think that I diligently saved money for my future.
However, now I realize I could have potentially saved more if I had taken more time to read receipts and invoice bills.
Moving forward, I read every bill that comes into my hands, including shop receipts.
Human Errors vs. Computer Errors
Human error is a given; we all make mistakes, but so can computers.
A simple glitch could cost you money; you won’t know about it unless you read the bill.
For example, we used a “Spend $50 save $10 Coupon” just yesterday at Shopper’s Drug Mart.
The cashier scanned our printed coupon for the discount and presented it as a “coupon” on the receipt.
When I got home, I took out the calculator and did the math.
The $10 was not deducted from the bill. I could have potentially lost $10.
Our money is hard-earned, and to dish it out without reading all the details is silly.
We are also seeing more and more consumers using their Android or iPhone for mobile banking, but take caution.
Also, check with your bank to see how you are protected so you understand whether you want their mobile app.
Terms and Conditions and the Fine Print
When you sign up for a credit card, the terms and Conditions are also essential to read.
When we began reading our credit card bills, we noticed that what we owed was very clear and at the top of the bill.
- New Balance $540.24
- Balance Due $540.24
- Minimum Due $10.00 (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 two spots, one at the top and 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 to avoid interest charges on purchases appearing on this statement for the first time.
Below is the critical minimum due that you should avoid at all costs.
Pay your credit card bill monthly, or don’t use it.
The Minimum Due is the minimum amount you need to pay to avoid your account going into default.
Understanding Repayment Calculation
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 four years and seven months to repay the balance shown on this statement, which is ONLY $540.24.
Are you ready to pay this credit card bill for four bloody years?
The next time you swipe your plastic, think about whether you will pay the bill off in full or only the minimum payment.
Please don’t ignore the numbers; they don’t forget you.
This alone should shake up your financial budget and get you thinking about paying off a credit card as fast as possible.
We always pay our bills in full; the fine print is for those who don’t.
Every month, when bills start arriving, we open our Canadian Budget Binder Spreadsheet and match up any receipts we documented and to what credit card.
We ensure that every expense on the bill matches what we have on our spreadsheet.
You never know if you are billed twice or if any other errors have occurred.
The same goes for any bank fees you are charged.
Ensure you can account for all the times you are charged to ensure everything is accurate.
However, contact your financial institution or the business that created the bill if you find a discrepancy.
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 Fraud
According to the Royal Mounted Police, credit card fraud can happen in several ways.
If your card is lost or stolen, a criminal can use that card to manufacture a new card and use it just about anywhere, including shopping online or over the phone.
You can read more here about how to protect yourself.
You may think it’s only $1.00 or $5.00, but it will all add up if that keeps happening.
What would you do if you found an extra charge on your bill?
You could use this money to pay down your debt, but only if you catch the errors.
If you don’t, well, it’s 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, it will tell you they may tack on an excellent percentage of the total account if you read closely.
I remember the first tax bill we messed up as it was the first we had ever had to pay.
The city charged us $10 for being late paying the taxes as we didn’t add them to our mortgage as most people do.
I was a new homeowner 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 have to explain myself.
Paying Off Your Hydro Bill
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) by 1.5%.
We were taught to read before signing, and the same stands before paying bills.
Always read before you pay your bills to make sure they are accurate.
Now, you’re on to the final step 10 in the mini budgeting series. Good Luck
Discussion: Have you found any errors after reading any of your bills?
Please share your comments below. I love hearing from my readers.
Budgeting Mini-Series Continued
Just in case you missed the other 8 Steps in our Budgeting Series, here they are for you;
- How We Designed Our Budget Step 1– Gathering All the information
- How We Designed Our Budget Step 2– Categories
- How We Designed Our Budget Step 3– Tracking Receipts
- How We Designed Our Budget Step 4- Note-taking
- How We Designed Our Budget Step 5– 5S Organization
- How We Designed Our Budget Step 6– Who Does What and When?
- How We Designed Our Budget Step 7– Balancing Our Budget
- How We Designed Our Budget Step 8– Knowing our Coupon Savings
