Good Morning Green Panda Friends and Happy First Monday of February. It’s past the first of the month and that means that rent is due, and so are all of our regular monthly bills. Today we are discussing why it’s important to pay our bills on time and how we can budget our income to make sure that we don’t miss any of our payments.
It’s important to pay our bills on time because our hydro, cable, and electricity bills are a form of credit. If we miss a payment it can definitely affect our credit score in a negative way. This past week I had a client come and see me who was retired and living on a fixed income. He needed help with his budget because he doesn’t have enough income to cover all of his monthly expenses.
When I asked where his money was going each month he said that it was being spent on utilities and maintenance fees to keep his home in the suburbs up and running each month. I don’t understand why one person who lives alone needs a big house with a pool and a double garage. Extra space just means extra expenses for heating, cleaning, and up keep. When I asked him if he wanted to sell his house and downgrade to a more affordable home he said no, he was very happy and did not want to move.
Keeping his home was putting him in debt, and borrowing to make ends meet is never a smart financial strategy. If we can’t even afford to pay our monthly bills we are never going to be able to afford to pay our monthly bills and repay a loan at the same time. Budgeting is about making sure that we always have more income coming in than we have going out to pay our monthly bills and expenses.
3 Helpful Tips to Make Sure Your Bills Are Paid On Time
1. Make Payments Every 14 days. It is a lot easier to divide our bills into two smaller amounts than it is to make one large payment each month. It is a lot easier for record keeping purposes to set up automatic payments each month and have our bills directly debited from our bank accounts. However it may not be what is best for our budget. If we don’t have the money in our bank account to pay the monthly bill in full then our payment will be returned due to non sufficient funds (NSF) and that is very harmful to our credit score.
2. Check The Total Amount Due. Before we make any monthly bill payments we should always double check our last statement. Even if we miss our payment by $0.03 our bill company will mark our payment as being late; and this will show as a missed payment on our credit bureau.
3. If We Can’t Afford It Then Make Cuts. If we can’t afford our bills every month there are only two ways that we can fix this problem….earn more income each month or make cuts to our monthly expenses.
Photo by Camera Eye
Tahnya is 30 years old and lives in Montreal Quebec. She graduated in 2005 from Concordia University, and she currently works for a major International Financial Institution. She recently launched http://www.mediamadam.ca/. You can follow her on Twitter @TahnyaP.