Wednesday, September 16, 2009

Why Pay Your Bills on Time?

As we all know paying your bills on time is key, especially for your credit score’s sake. However, I wanted to share a little experience that I had. Our family is a paycheck to paycheck family. Often times I am a little short or waiting for money to come in when a bill is due. At first I sacrificed everything for the bill to be there on the due date, but in the end I usually would pay many overdraft fees on my other transactions just to get the bill paid. Please do not think I am advocating not to pay your bills on time, but if you find yourself between a rock and a hard place these things in mind:

  1. Most of the time the late fee on a particular bill is less than the sum of overdraft fees you would be charged from the bank for additional transactions coming in. For example, most late fees are a small percentage (2-5%) of the bill, while overdraft fees are usually $25-$35 per transaction.
  2. Late payments are usually only reported to the credit bureau if they are 30 days overdue. So you are probably OK if you are only looking at only a few days late.
  3. Put your family first. If you are like us and have no credit cards, I have made the choice that my family and the food and necessities we need come first. I always try to pay all my bills on time, but if I have to choose paying a bill on the due date and getting some food for the table; I put food on the table. In our case most of the time the money we need to pay the bill is usually 1-3 days out, because my husband is a contractor and gets paid sporadically.

I want to reiterate that I am NOT advocating for not paying your bills on time. I just wanted to share that being 1-5 days late on your bill is not the end of the world, as I once thought it was, and making sure that your family has what it needs is really key.

Do any of you experience this financial juggling? How do you handle it?

As a side note, I am SO excited about continuing my posts on Walt Disney World. Tomorrow I will feature Animal Kingdom! Have a great day!


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