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

You MUST review all of your bills and how to handle any errors

Does this scenario below sound like you when you get bills in the mail or pay for something and grab a receipt for the purchase?

You either open the front door, walk to the post box or go to the post office to gather your mail. 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 on top of the table, in the junk drawer or your office desk.

Is this a big mistake? You bet it is. It is so important to keep your finances organized and to review them at all times because one simple error could cost you money that you worked hard to earn.

I’m not sure 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 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

• The Due Date
• How much money we owe

We never gave a second thought to look at ;

• 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 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 and the Fine Print

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, 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 credit card bill for 4 bloody years? Think about it the next time you swipe your plastic as to whether you will paying the bill off in full or only the minimum payment.

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.

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 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 to make sure everything is accurate. If you find a discrepancy contact your financial institution or the business where the bill was created.

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

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%.

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 your bills to make sure they are accurate.

Discussion: Have you found any errors after reading any type of bill that you were required to make a payment on?

Share your comments below. I love hearing from my readers.

Just in case you missed the other 8 Steps in our Budgeting Series here they are for you;

1. How We Designed Our Budget Step 1– Gathering All the information
2. How We Designed Our Budget Step 2– Categories
3. How We Designed Our Budget Step 3– Tracking Receipts
4. How We Designed Our Budget Step 4- Note-taking
5. How We Designed Our Budget Step 5– 5S Organization
6. How We Designed Our Budget Step 6– Who Does What and When?
7. How We Designed Our Budget Step 7– Balancing Our Budget
8. How We Designed Our Budget Step 8– Knowing our Coupon Savings