UNDERSTANDING HOW TO AVOID PERSONAL FINANCE MISTAKES BEFORE THEY HAPPEN WILL SAVE YOU TIME, MONEY AND YOUR SANITY.
Sometimes financial mistakes can be very expensive and a big lesson for those involved depending on what the mistake was. When it comes to a missed bill payment it’s imperative that you take the situation seriously because it can come back to haunt you.
We’ve had one missed bill payment since getting married and that was paying our city taxes when we moved into our first house. Of all things to miss paying but we were new homeowners and there was so much going on with the move and legalities of it all that we forgot.
Missing your bill payment is NOT an excuse.
All it took was that one missed bill payment for us to realize that we needed to get a bill payment system in place and fast. We were never late paying for bills when we dated and weren’t about to start while married.
Missing one bill payment or even a few could have the following consequences;
- Affect your credit score if reported – Do you order your free Credit Report each year?
- Potential loan/credit application denial
- Late fees = more money
- Start the ball rolling for debt pile-up
- Shut-off or removal of services by the provider
A recent email from a CBB reader prompted me to write this post only because the last time I wrote about bills Mrs. CBB and I made an over-payment to Reliance Home Comfort. Although some of you might think that’s not so bad it can be for someone who really needs the money.
Related: How do you pay your bills?
The company just tells you to pay less or nothing the next month when a bill payment is due. A simple mistake like this could mean another missed bill payment because you don’t have the money budgeted for error. If you don’t have back-up emergency savings to cover mistakes such as a missed bill payment you’ll have to come up with another way to pay the bill.
Missed bill payment tumble effect
One missed bill payment could cause the tumble effect for someone living pay cheque to pay cheque or who has little to no emergency savings. The tumble effect is when one error can cause a host of problems for everything else down the bill payment list.
Dear Mr.CBB,
My fiance is horrible with paying his bills and I’m worried about how this will affect our marriage. Just recently I found out he didn’t pay for his cell phone bill which meant I had to pay it for him because he ran out of cash.
The money he has in his bank account he spends every month to pay bills and for whatever else he needs. When the money is gone it’s gone which means if he misses a bill it won’t get paid until the next month. He doesn’t budget like I do and I’d prefer not to bail him out every time he fails to look after his financial situation.
What can I do to make him realize this is an important topic? I want to buy a house in the future with him but with the rising costs of house prices and everything else we may never own and only rent if this keeps up.
Thanks for any suggestions.
Carol.
A budget isn’t going to help you pay your bills on time however it will hold you accountable to your spending habits. You will learn about how much money you earn, what your net income is and how much money you have to spend every month including an allowance schedule .
Making the time to set-up a budget, understand how a budget works and teamwork to making it balance every month is a great start.
The best way to avoid the missed bill payment tumble effect is to have;
- Emergency savings
- Side-income
- Bill payment schedule
- Automated bill payment
The last thing you will want to do is get involved with advanced Pay Day loans , over-draft protection or using money from your retirement investments for a bill payment. One will most likely keep you in the debt loop and the other will pinch cash from your future retirement days commonly with a fee attached. Avoid these at all costs if you can.
Related: Should I cash in my RRSP’s to pay off debt?
Automate bill payment
The hands in your bank account method doesn’t work for everyone because you authorize companies on your behalf to remove money for a bill payment. Once you set up your automated bill payment the work is done for you.
You no longer have to worry about paying your bills on time however you still have to worry about making sure the money is available in your bank account. A missed bill payment and non-sufficient funds to pay for one is just as important. Plus, even automated banking is not error free whether it be the banks fault or the billing company.
Bill Payment Express Schedule
The best way to do a bill check is to create a payment express schedule especially for couples. I was going to write an entire blog post about how we use a bill payment express schedule and offer you a free printable to add into your budget binder. (Keep an eye out for this in the coming weeks)
This bill payment express schedule is for those of you who like the old-fashioned pen and paper method of tracking bills like we do combined with our excel budget to stay on top of our monthly finances. Certainly you could use an online bill payment express schedule or document which you can review and edit but we found a quick paper visual works best.
In the meantime I wanted to touch on the bill payment schedule which has helped us remember to pay our bills on time. We’ve automated some of our bills but we still pay our taxes, hydro, Rogers, water heater and credit cards manually.
In a nutshell a bill payment schedule is simply a month to month bill check calendar of what needs to be paid and when. Once you pay each bill you tick off that it’s paid for your own reference. We find this to be the easiest route for our busy schedule.
We keep a list posted in our office and it’s maintained by both of us which helps us both see what is paid and what isn’t. Having a bill payment account also helps us track what is paid if we log into our bank app on the Samsung 7 or online via the laptop or desktop.
How to pay a bill
If you’ve moved out of your parents house for the first time you might not understand how a bill payment is made. It’s important to review the bill payment methods with every company you deal with so you know what you can and cannot do. Add key info into your payment schedule so you remember.
- Where can I pay my electric bill?
- How do I pay my city taxes?
If you’re not sure how much you should be paying you can check your outstanding bill payment amount online or make a phone call to the company. All bills and credit cards have a toll-free or local number you can call to ask customer support questions.
Most bill payment services allow you to;
- pay in person
- pay by cheque
- pay in cash
- pay by credit card
- online bill payment including mobile apps
- snail mail payment (mail it in)
How to deal with a missed bill payment
Don’t panic if you’ve made a mistake, we all make them. f you’ve received a phone call about a missed bill payment, received a new bill with double the amount due or realized it on your own it’s imperative you do one thing first, call them.
Once you make the phone call to explain the situation you may feel better about that missed bill payment. Most often they will require you to clear up the outstanding balance with the next bill which means two payments in one. If you don’t have that money in the bank you will have to pull from your emergency savings or find a way to come up with the extra cash during that grace period.
If you are faced with late fees you must pay them and hopefully for the last time. If you’ve managed to bounce a cheque because you didn’t have the money in the account you’ll be dealing with bank fees as well for Non-Sufficient Funds. This can run you upwards of $25 for this mistake. Time is money.
Dealing with an unorganized partner
If you’re worried about the way your partner or spouse to be is handling their money or bill payment methods it’s important to talk about it. The money stress that you are feeling is only going to escalate if the problem isn’t dealt with. I can’t tell you how important it will be that you sort this out BEFORE you get married or commit further into the relationship.
If you are both on two different financial journeys then someone is going to get burned whether it be now, 6 months from now or years down the road. Sometimes people who pay their bills late all the time continue to do so until a company has had enough.
Using a budget and a bill payment schedule along with having emergency savings will 100% help solve the problem of a late bill payment. If you can solve the financial concern using a method that works for both of you, great. If not then you need to decide how important of a concern this will be for you before moving forward in the relationship.
Unorganized finances don’t stop at a bill payment. You might also notice other things such as spending too much money or no financial worry until it’s too late. I hope I’ve given you a few tips today to help get you both on the same page with paying bills.
Below are comments from some of my amazing readers who wanted to share how they tackle a bill payment. Missing a bill payment once or twice isn’t the end of the world but clearing up the reasons why will make a big difference to your bank account and sanity.
Well I have definitely thought I paid a bill, but really didn’t as well as accidentally incurred NSF fees when I was in Germany because of the length of time it took for checks to clear from their. Each situation is different, but if it’s an NSF I suggest calling the bank. If you don’t have it happen a lot sometimes they can reverse one or two.
As far as not forgetting to pay a bill. I try to make sure I pay almost all of them at the beginning of the month so it is easier to remember, but another way to make sure that you don’t forget is you could use either Google Calendar or Outlook Calendar and make sure it is tied to your phone to remind you at least once before it is due, and once it is done it could be marked off on the calendar as well.
I just started using google calendar to track stuff….it makes life so much easier than having 5 calendars between work and home.
Pay the bill when you realize it’s late along with late fees if any occur on the following bill. If it is just late being paid a courtesy call could be made to the supplier and often they will deduct the late fees.
We have pre-authorized debit for most of our bills and know exactly when they come out of the bank. Only reputable companies have pre-authorized payments like our house insurance, car insurance, and hydro bills.- Kevin, Frugal Dad of Daughter
The cell phone bill is paid once a year and our satellite is paid via internet banking the morning of payday. We only get paid once a month so we make sure the funds are left in the bank for the bills. As for NSF fees maybe see about overdraft protection as it is up to you to make sure the monies are in the bank to cover the amounts.- Colleen K.
I found it really hard to keep on schedule with anything, including bills, during the months before my husband passed away. If I received a reminder, I would phone and apologize for the delay, explain the circumstances and arrange a way to catch up on my payments.
It finally occurred to me that the best way to take the burden off my shoulders was to automate my payments. Once they came out of our account automatically, all I had to do was ensure there was enough in the account at the beginning of the month to cover the scheduled withdrawals. I found that much easier and have continued with automated payments ever since. – Beth Ann
I had issues with my Dad’s bills when he was first hospitalized. I made a lot of phone calls explaining the situation and the fact I did not have power of attorney to pay them but I promised to look after them as soon as I could. So long as I kept them in the information loop they were willing to work with me.- Christine W.
Usually they roll over the missed payment with next month’s payment in your next invoice. You speak with customer service in billing. If you keep missing payments they might cancel your service depending who it is with. I used to work for a big insurance company in the US and if we saw a pattern of missed payments we might cancel it.
Depends on the customer because if we found out someone was in the hospital or had extenuating circumstances we would forgive that and reinstate them.We would take it on a case by case basis. Some companies hit you with a late fee. Depends on the company.
She needs to put him on auto payments. Some companies do report you to a credit company if you keep offending them by not paying on time. The best way is to contact your companies and say “hi I missed a payment, need to pay up and be current may I do that over the phone” and set up auto payments.
It’s best to nip any money problems in the bud before marriage. Remember #1 cause of divorce is money fights and money problems.
Solve this before you get married. Best wishes.
– Lila D.
– Lila D.Once you have your bill payment schedule under control you can relax even more because now you’ve got yourself covered. Is it worth it? You bet!
Discussion Question: Have you ever had a missed bill payment? What did you do to make it right? Share your views and comments in the comment section below. – Mr.CBB.
A week in my life
I’ve been super busy at work wrapping up paperwork this week which is a big part of my role. Documenting everything is part of my job and it has to be exact with no errors or it could cost someone a life.
This week we had to make a trip over to Hamilton which took up most of my day off which was fine. It’s like a mini road-trip for the family and we do a bit of shopping afterwards at second-hand shops before heading home.
We sold a few more items on Kijiji from our Spring cleaning blitz. Feels good to have space back in the house. Slowly stuff is moving but we’ll be offering it for free on the road next Saturday if it’s not gone. It just makes it easier than having to answer online ads for free stuff.
Parenting life has been challenging for us once again. We’re still working on his eating habits and his sleeping. It’s time he slept in his own bed but now we have to take the long road to get him there. We still wouldn’t change a thing about having him sleep in the room with us from the time we brought him home. We just can’t get rid of him now, lol.
Nothing else happening apart from starting some outdoor Spring cleaning again this coming week if the weather stays nice. A nice surprise snow storm the other night made me feel better about waiting to take the snow tires off the vehicle.
Have a great week everyone… It’s almost Easter!
Mr.CBB
CBB Published Posts
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Top Post This Week: How Much Should My Grocery Budget Be?
- Anginetti Lemon Cookies
- Exclusive Easter Menu To Fit Your Budget
- How to lower household expenses without guilt and our March Budget Update
Personal Finance Bloggers and Fans: I’m currently recruiting for guest posts on the blog while we go away on holidays. This is your opportunity to get published on CBB. If you have a topic idea and interested please contact me via email. canadianbudgetbinder@yahoo.ca let’s talk.
Making a difference (MAD) 2017
Welcome to the 2017 Making A Difference series! Join the networking movement of Personal Finance Bloggers around the world. If you are a personal finance blogger and would like your blog to be featured simply drop me an email. I’m currently booking June/July/August 2017-Limited spots.
Happy Saturday everyone,
My name is Chelsea and I’m a mom to an adorable one-year-old son, wife to an incredibly supportive husband, hedge fund investor, personal finance nerd and now the creator of Mama Fish Saves .
I started Mama Fish Saves in February of this year with the goal of simplifying personal finance to help young families achieve their dreams and raise money smart kids.
I have been passionate age about finance for as long as I can remember and love helping people understand that mastering your money isn’t as complicated as Wall Street wants you to believe.
88% of millennial couples note money as a source of strain in their relationship and over 50% of couples argue about money at least weekly. These numbers are staggering. In my opinion, this huge divide is caused by (1) a lack of understanding about finance and (2) an inability to talk to our spouses about money after years of being told “money is the root of all evil” and that it is improper to discuss money at all.
I regularly post about budgeting, investing, saving for college/retirement, career advancement, working from home, and strategies to effectively educate your kids about money (even if you feel like you don’t know what you’re talking about) on the blog.
The hope is that Mama Fish Saves will provide the information couples need to feel in control of their money and empowered to start productive financial discussions with their families! Money is an important part of our day-to-day lives. It’s about time we talked about it!
Thank you for having me, CBB!
Peace & love,
Chelsea
Fan Brag of the Week
Send in your deal or brag of the week to canadianbudgetbinder@yahoo.ca along with a photo and small write-up to be entered into our yearly draw. Enter as many times as you like. If your brag gets featured you get an extra ballot in the draw.
Hey everyone, I’m back with a deal!
Now this is coupon shopping 101- I picked up 12 boxes of Kraft Dinner, 1 box of 12 portions of fish for the tenants and a Chapman’s Sundae ice-cream….Total cost to me $2.30- Colleen K.
Colleen used coupons from the manufacturer for this shop. You can email Chapman’s once a year and they will mail you a coupon. See the link at the bottom of this blog post today.
CBB Finance Tip
I’ve had fans ask me why we have so much money in our savings account ($200,000+) and the answer is always for investments and renovations. Should we go out and spend money? Sure, as long as we budget it like our upcoming holiday that cost us $2500.
There are many people who have money, spend it and are broke or struggling to pay the bills. If you’ve saved money pay your bills, invest and do what you think is best with it. Talk to someone who can help guide you if you’re unsure. Spending money just because you have a healthy bank account might not get you into trouble at first but eventually it could lead you down the road to $0.
Top finance post
This week Jen over at Does That Make Sense says that, “You don’t need a budget just more money“. I agree that you need to budget in some fun money otherwise you can become very boring and miss out on things in life that you might kick yourself for down the road.
I also believe that budgeting is more than just numbers. It’s a snapshot of your past, present and future. We will always use a budget even if it does suck to ask for receipts all the time and document everything. Like my quote says “Just because you have money doesn’t mean you have to spend it”. Even if you make more money that doesn’t mean that you’ll still come out ahead.
Imagine if a business ran on that premise. Imagine now your bank account as a business. How would you want to run it? Choice is yours.
Excellent post, enjoy the read.
Frugal recipe hot spot
Food is a big part of any budget and a struggle for so many people which is why I’ve created frugal recipes for my family and yours for many years.
I have a second Facebook page called The Free Recipe Depot where I exclusively share recipes from Food Bloggers around the world.
Check out the Free Recipe Index on CBB compiled of frugal recipes that are 100% tested and accepted by family and friends!
This week Mel over at A Virtual Vegan Mel has this awesome recipe for Cinnamon Roll Cake In A Mug. Now, if you’re like me and craving something sweet but don’t want to make an entire recipe this cake in a mug is perfect. Mrs. CBB makes low carb high fat cakes in a mug too.
Do It Yourself
I’m a huge fan of gardening whether it be flowers, bushes or food and to do this you need some excellent soil.
Composting is a big part of the CBB household as we use the gorgeous black compost on our gardens every year. I typically have a full bin come Spring or Summer.
If you don’t have a compost heap Whole Home Garden says you can still improve your garden soil by saving your
- Banana Skins
- Coffee Grinds
- Egg Shells
Once you dry them out you can blend them up or toss in your garden and mix it into the soil.
My mother-in-law tosses everything into the garden all year. There is no compost heap either she just tosses it in and they have some of the best and biggest organic vegetables I’ve ever had.
What else can you think of that you can use on your garden without having a compost?
Search term giggles
Always begin and end your day with a SMILE!- Mr.CBB
Every week I get tens of thousands of people visit Canadian Budget Binder because they did a search online and found my blog.
Most times funny, Sometimes serious.
- Is it wrong to take money from my husband especially if he spends it recklessly on his girlfriends?– I don’t know what type of relationship you are in but taking money is wrong. The best thing to do is talk to your husband. If you don’t approve of his girlfriends you might want to tackle that topic too.
- How to make donuts like Tim Hortons– I’m sure they have a website somewhere with all of their secret recipes.
- Meat Markdown Day Ontario– Uh huh, Is this such a thing?
- Money Making Secret Societies– Yes, because I’d know all about them.
- Who gets rich on credit card debt?– I don’t know but if you find out fill me in.
That’s all the fun for this week, thanks for dropping by and we’ll see you all again next Saturday.
Mr.CBB
Don’t forget to Follow me on Social Media and Subscribe to the blog.
Hey…if you see any mistakes let me know. I’m not an editor just a guy who likes to write and yes I make mistakes.
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- The Saturday Weekend Review #215: Spring Cleaning Tips To Help Get Your Check-List Started
- The Saturday Weekend Review #216: What Basic Money Skills Should Be Taught In School?
- The Saturday Weekend Review #217: The Secret Society Of Debt Freedom
Abner Jennings says
I wholeheartedly agree with the importance of regular bill payment. One missed bill can create huge problems when it comes combined with the next bill. In fact, in the event of not having the requisite amount in your bank, I would advise taking an online loan in Canada. It is fast and hassle-free as the entire procedure takes place online. Repayment is also as easy as it can get.
DebtWatchers.net says
At DebtWatchers.Net we strongly recommend that partners jointly open a bank account and that all household bills are paid from that account, by it being put in funds at the beginning of the month when you have both just received your pay cheque. Then if either of you screws up during the month the joint bills are still covered and the one that screws up has to sort out the mess they have created themselves. And not be bailed out by the other!!
Cody @ Dollar Habits says
Great to see you featured here, Chelsea! Love the MAD series, Mr. CBB. Thanks, again, for having me a few weeks back.
Mr. CBB says
You’re welcome Cody~~ I have a blast meeting new bloggers and sharing them which is why I’ve been doing it for 4 years now. 🙂 I”m still looking to fill about 25 spots…send your mates over to introduce themselves. Have a great weekend.
Anne Russell says
Missed payment…last time was about 4 years ago. It still stings (hurts my feelings really.) I had a $25/month commitment to Home Depot as part of their no interest for 1 year financing. I missed a month (still can’t tell you how or why, except that I forgot.) I got the call in the next couple of weeks and rectified it right away. However, one year later, when reviewing my credit report, there it was. It was the stupidest mistake, so small, yet there it was. A tiny blip.
In addition, I found that receiving my bills through Canada Post was inefficient. My kids would get the mail every day and it rarely ended up in my hands. I found piles of it everywhere! Plus, given the piles, I found it easy to ignore things.
Since then, I have one month of bill payments in the bank at the start of the month. I pretend it’s not there. As the reminders (on epost from Ontario Hydro, Bell through email, Koodo through email, and very occasionally regular mail notices, etc.) I pay them on the spot on my phone. I only automated my irregular payments such as insurance and municipal taxes as the dates are scattered.
Speaking of automating payments, my parents automated their Rogers account and for months they were charged all over the map! Many phone calls, many wrong billings, and they switched back to mailed billings. No more wrong billings, coincidently.
At this point in time, I actually overdo the reminders! Too much of a good thing, these reminders.
Essentially, we are all very busy and have many competing priorities. It’s so easy to forget a small amount.
I also changed my overdraft (eliminated the monthly fee) and left it as per use (at the suggestion of the bank teller). $5.00 per use when if I go into overdraft. Which hasn’t happened but doesn’t cost me anything. It’s kind of an insurance in case we crash. But it’s not part of my financial plan (in that I don’t use it.) In addition, cheques are very rarely used now.
Mr. CBB says
Hi Anne,
Our overdraft is the same as yours $5.00 if we use the service which is reasonable considering they are saving our butts if we need the money. I would NEVER automate Rogers but since we’ve been with them for so long we know that when we update our services the charges will fluctuate for about 2 months until it’s steady as they have partial charges. We get our bill through email but one of the reasons why we are hesitant to automate. It’s more of a hassle if something goes wrong. At least if we do it we know it’s paid right. Yes, one missed payment even as small as $25 can sit on a credit report. Good thing you looked. Thanks for sharing your experiences. 🙂