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    Home»Retirement planning»5 Costly Mistakes People Make When Paying Their Bills
    Retirement planning

    5 Costly Mistakes People Make When Paying Their Bills

    December 12, 20225 Mins Read
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    Stressed businessman made a mistake on his laptop
    fizkes / Shutterstock.com

    Nobody likes to pay their bills, but chances are you have at least a few. And, of course, the rules depend on who collects the money. You may have automatic payment options, or you may be sending checks using your bank’s bill payment features.

    When paying bills, a good system can make a big difference, especially when it comes to extra charges and double charges. Here are some mistakes to avoid when paying your bills.

    1. Not reading your statement

    Woman reading a magazine and watching television
    Odua Images / Shutterstock.com

    You have the bill and you can just pay it, right? Especially if you are on automatic payment. Even if you use automatic payment, you should still review your statement.

    Your statement includes information about charges, fees, and other information. Check your statement to make sure you’re not being charged for services you don’t use. You can also see if any fraudulent charges have been added to your bill.

    Check your statement against your own records and verify that the invoice is accurate. If you find any inaccuracies, contact the issuer as soon as possible. Ask questions about the invoice and check your records. Note when you called and who you spoke to. You can also contact the issuer in writing if the invoice is unresolved.

    2. Set it and forget it

    A man looks at the bills
    tommaso79 / Shutterstock.com

    Autopay can be a great tool to make sure you don’t pay late or miss payments. However, checking your payments, especially your first payment, is a good idea when setting up your automatic payment.

    Depending on the company, setting up your autopay account may take several business days. In the meantime, you may need to make a payment. In some cases, you may not be notified of a missed payment until the next billing cycle.

    Find out when the first payment will be made from your account and verify that the company has the correct information. Then double check to make sure the payment came out of your account as expected. Once your automatic payment is established, check regularly that the amount is removed on time.

    3. Assuming a grace period

    woman slapping forehead
    Asier Romero / Shutterstock.com

    Some companies offer a grace period for your payment. So if you’re late, you won’t be charged any fees as long as you pay within a few days. However, not all companies offer this.

    Just because your last landlord didn’t start charging late fees until the fifth day of the month doesn’t mean your current landlord will be so forgiving. You could start paying daily late fees immediately.

    Read the fine print of all your agreements and check when late fees start piling up. You don’t want to be caught off guard thinking you have time to rectify a mistake.

    This also applies to automatic payment and bill payment. Consider setting up an automatic plan that allows you to withdraw your payments two or three days before the due date. This way you can detect errors in advance and you are less likely to run out of time.

    4. Paying fees you can get rid of

    Bored man arguing on the phone
    fizkes / Shutterstock.com

    Watch out for fees. These can add up quickly and some can be easily avoided.

    Some of the common fees you can probably avoid include:

    • Late fee: Make sure you don’t pay late. Schedule automatic payments at least a few days before the due date. Know your due dates and ensure your payments are made on time.
    • Convenience fee: Check how to avoid convenience fees, which can be costly. Some companies charge higher fees for credit card payments, for example. You may be able to avoid them by using your bank account, debit card, or setting up bill payment through your bank.
    • Paper statement fee: If you receive paper statements, charges may apply. Check if you are charged for receiving statements by mail. Avoid these fees by switching to digital statements.
    • Other Exempt Fees: Find out if other fees can be waived. You might be surprised to find that your bank will waive certain fees associated with bills if you maintain a minimum balance, or that you can get a fee waiver by choosing autopay with some companies.

    5. Not reviewing the price you pay

    Elderly couple in front of a laptop
    fizkes / Shutterstock.com

    Finally, remember that you can always shop around for a better rate. Don’t assume you’re getting the best price. Before you lock yourself into one bill, consider different plans and costs.

    Once you’ve chosen a service, remember to make sure you’re still getting the best deal periodically. For bills like insurance, you might get a better rate by comparing different policies.

    You can also search for different service providers for your cell phone and internet. See if you can find a better deal and let your current provider know you might cancel. They could match the price of their competitor. And, if they don’t, you can switch and save some money.

    Take the time to review your bills, assess if you could save money, and act accordingly.

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