I live in fear of missing a monthly bill payment. The penalties are severe.
If a missed bill is for a credit account, the interest rate will jump considerably. A late fee is usually $30 or more. A credit score drops, too. If I refinance my home mortgage or buy a new house, I have to explain in writing to a prospective lender why I missed that payment. It's embarrassing.
Last month, I told the story of a Fort Worth couple who forgot to pay their quarterly property taxes and got socked with a $56 late fee. I wrote about them because I could sympathize. It's easy to miss a key payment. A bill gets stuck in a magazine. Or it doesn't arrive. So I asked readers what system they use.
My old system of paper bills coming in and mailed checks going out isn't as reliable. First-class mail delivery is expected to take longer. And I'm no fan of e-bills. Also, if I can help it, I won't let anyone draft automatically from my account. Obvious solutions aren't working for me. Here are ideas from others:
Bobby Mills of Hurst keeps a check-off chart. Unlike others, he doesn't use a computer program. He takes graph paper and puts the name of each bill down the side, and the name of each month across the top. "I have never had a late payment," he says.
Marilyn Peterson of Arlington says she uses online banking exclusively. She doesn't pay finance charges or late fees because she pays her bills in full. She carefully reviews her monthly statement, reconciles her checking account (is that a lost art?) and pays by direct draft. Her system? In her check register, she lists all her bills that she will owe that month - but without an amount. When an e-bill arrives, she writes the actual amount into the check register beside the name to show it is paid.
Charles Humphrey of Fort Worth uses Quicken software. "Bills can be scheduled and recorded when paid," he says. "Also you can see when a scheduled payment has not been made." For those that don't have Quicken but use Microsoft Outlook, he suggests setting reminders on the calendar portion when bills are due.
David Stewart of Grand Prairie uses an online account with his credit union to help him remember. "Whenever I log in to my account and open the bill-paying service, I can see little red flags indicating that I have a bill that has not been paid." To gain reward points, he says that he pays his variable bills such as electric and gas through credit cards that offer automatic payments. He has used paper logbooks, Excel spreadsheets and Quicken. "Nothing works as well as automatic payments with vendors, and one-stop notification and payments through my credit union."
Carl Orton of North Richland Hills uses Excel software. "I have it sorted by date owed," he says. "I only use a paper copy though. ... I've had enough bills disappear in the mail, and I don't trust electronic bills for all my transactions. I've never been late, and yes, I've had to call a few companies when I haven't received their bills by the time when I think I should have received them."
Maggie Knapp of Fort Worth pays most of her bills with auto-pay or drafting options available at her bank. But she won't pay her cell phone bill that way. "I like to examine that bill first each month." [Smart.] "With auto-pay," she says, "companies will still send the paper bill in advance if you choose, and they draft the amount directly from the linked account on a stated date."
Trudy Hill of Arlington says she pays all her bills automatically with a Visa card. When the bill arrives, she pays everything off in one lump sum. "I'm never late, and I get cash back from Visa. Sweet." She shared her credit score. It's almost perfect.
Roberta Giefer of Arlington keeps her financial records in an old-fashioned ledger book available at any office supply store. "We can tell right away by the blank space if a bill has not been paid," she says. "We know to notify a creditor that we didn't get a bill in the mail. We can also tell if our fees have gone up too much from previous dates, or compare electric usage through the year."
The Watchdog column appears Fridays and Sundays.
Dave Lieber, 817-390-7043