by Tricia
I started working on our net worth for July and I noticed that our credit card debt didn’t go down one penny since the end of June. That couldn’t be right…could it?
You know that feeling of blood rushing through your body when you think you just made a mistake? That was exactly what it was like to see that we didn’t make a credit card payment in July. I quickly logged into our account online and I see a minimum amount due glaring at me. I am thanking my lucky stars that the due date was Friday.
I made a payment so that is fine. This is the card at 0% right now and the last thing I want is to lose that interest rate prematurely. Our checking account isn’t so fine. That payment put us in an overdraft situation if we pay our gas bill on time. I haven’t mailed it yet, so I’m going to pay it a little late this month.
I feel like I am back to the “good ole days” of shuffling around payments because money was so tight. We shouldn’t have to revert back to that. I don’t want to revert back to that! But I have been losing focus the past week or so. This happens every time when life gets too hectic on other fronts. The biggest culprit is usually work and that is the case this time. It takes up so much of my energy (especially when I have to work late) that the last thing I want to do is work on the computer more after work. Unfortunately, that also affects my blogging so that’s why I haven’t been around here on a daily basis lately. Even my participation in our budding business has come to a screeching halt because that is computer-based.
But back to the topic on hand…losing focus can be bad. We almost lost our 0% interest rate. If it wasn’t for me trying to update my already overdue net worth on here – I would have missed that payment. So I thought I would ask all of you for your input…
How do you keep focused on your finances when life is crazy? What tips can you share with others?
I actually lost a 0% rate on a credit card a few years back because I didn’t send the payment on time. I cried and begged and cried some more, but they wouldn’t re-instate it.
I have a list of all our bills, and when they are due. I try to check it now and then, to make sure I haven’t missed something. They don’t care if you didn’t receive the bill for some reason, so I’m trying to be pro-active. I’m sure glad you didn’t miss your’s!!!
I hear ya. I have felt like that lately too. Trying to grab a moment of sanity, which other things seems get lost in the shuffle. UGH! I have a monthly bill sheet that I developed into an excel soreadsheet. It is in order of the date due. Every week, I quickly look to see if I need to update it and print it and put it on my “bill clip board”. The bills are divided into weeks, so I know what need to be paid that week, based on the monthly plan. It helps to have it broken down by week. Yes, my blog seems to come last, since I don’t always have time to get to it either.(((sigh))))
I’ve lost a great interest rate once too. The due date fell on a Saturday and I sent the payment one day late via my bank’s bill pay. After a lot of letters and phone calls we got them to reinstate a low interest rate, but it was still higher than the promotional one. So now, whenever a credit card payment is due I pay it 10 days before the due date. I don’t even mess around with that. Utilities and stuff can always be paid a day or two late.
Right now finances always come first. Even if work is crazy I always spend at least a couple minutes each night checking bills and the bank account.
Someone recently tipped me off to this website and I’ve been using it and love it. Everytime I log in it has a list of reminders for me, and it even sends notices to my inbox when things are due. It definately helps! (and I need all the help I can get!)
http://juslivinglean.blogspot.com/2008/07/this-is-mint.html
I pay bills the same time every week. Sunday afternoon. Nothing changes that. It has become a habit. That way, I am always on top of what is coming up and it isn’t too overwhelming because I only have to deal with a week’s worth of paperwork and bills.
Losing a zero percent rate can be a very EXPENSIVE mistake – one I absolutely refuse to make. I use Quicken and have all my bills scheduled through it. This way I can see when everything is due on my monthly calendar. The program also reminds you several days before something is due.
I also have another rule in place. The credit cards get paid when I get paid – period. I get paid twice a month (the 15th and the last day of month). As soon as that check gets deposited, I log on and make my credit card payments. It doesn’t matter how early it may be.
I get paid every week so when we were trying to pay off our credit cards, I made a payment every single Friday. It helped me see progress and it just became routine. We were lucky though that between the balanaces and the interest rates, usually it was only one or two weeks until we had covered the minimum.
On another note, I know how much you want to get this all paid off, but if finances are getting tight like that, maybe you are being a little too agressive with your payments. I know it’s exciting to see the end coming near, but if you are now having to pay a bill late, maybe it’s time to give yourself a little more of a cushion. Just my $.02.
I would get really mad if I lost a 0% rate because of a late payment. The worst case is not only does the rate go away, they’ll jack the rate way up to the max just because it was late by a second. Credit card companies are always looking for ways or legal statements that trip up the consumer. Pay early, pay more, and pay off and never look back. The thing that helps me greatly is automating the payments. I know when each bill is due, so if I have a scheduled payment setup, it will always get paid. Don’t lean on technology too much though and manually verify the payment was made. I’m glad you caught your mistake before it was too late.
I have no advice on keeping on top of the bills when things are hectic. But, when I miss a bill payment it’s usually a utility…
However, you could avoid the overdraft on your checking if you transfer some money from your savings to to your checking to cover the gas bill. I know the savings is your emergency fund, but if the gas bill isn’t high this might be a good idea, and likely to be less expensive than hitting an overdraft charge.
Ooo, close call! It helps us to stay focused by keeping all of our budget stuff in Excel. We use Microsoft Money to track/balance our actual accounts. But we use Excel simply because it helps us make sure every bill is paid and none slip through the cracks.
I have it organized by tabs at the bottom of the spreadsheet – I have a “Master” tab for all of our debt and savings, and the progress we’re making. This is just to keep me aware of our progress, but isn’t vital to the spreadsheet.
After the Master tab I have a tab for each upcoming payday and the bills to be paid with that check. For example, we get paid twice a month, so right now I have tabs for 8/15, 8/31, 9/15, and 9/30.
On each payday tab I have our incoming $$ in one column, and then each itemized outgoing underneath that, and a running balance to the side. For example it might look like this:
Deposit $100
Mortgage $30 $70
Electricity $10 $60
Credit card $15 $45
Loan pmt $5 $40
etc….
This is especially helpful for the once a year bills you have to pay or even the every-other-month ones (like our trash and water).
If you’re ever want to see my whole spreadsheet, email me and I’ll send you a version of what I have.
This was a novel of a comment. 🙂
I use my bank’s bill pay feature and have my credit card set up on autopay. It is a 0% intrest card and I’ve always been terrified of losing that rate, so I have it paid about 15 days before it’s due. The other bills I receive, I will log onto the billpay with the pay date of when it’s due. When things are crazy here, I tend to get off budget and spend too much…mainly at the grocery store. I’d move money over from savings though and pay the gas bill on time and have the cushion. Pay yourself the money back to savings at the next paycheck.
I have things automatically charged to two credit cards. Therefore, I just have to pay 2 bills a month.
The only thing that works for me is to create a physical object that you notice and have to move or change as a reminder. So, if the cc bill is issued on the 15th, put a postit note saying that on the 15th on every month of your paper calendar and put the paper calendar on the wall where you see it every day. When you pay the bill, pull the postit note off and toss it. When the calendar is clear for the month, you have nothing you’ve missed.
Gas bill’s an easy one to let lag for a week or two. Not that I’m supporting that habit… but don’t stress about missing that one is what I’m saying. Waaay more important things to stress about.
In answer to your original question, I guess I’d say prioritizing is the only way when things are crazy. I really have to say, “not this, not right now, not the highest priority” and be willing to put something down unfinished because something else is more important, including sometimes just sitting and clearing your mind for five minutes before deliberately starting something else. Otherwise you can start to feel like a puppet tugged around by the insurmountable list of things undone.
The 0% credit card–very high priority. It’s not just the rate, it’s the insane loan shark penalties they would hit you with for missing a payment. Ours has that, anyway, like 32%. Glad to hear you caught that payment. Shew!
I wouldn’t want to lose a great promotional rate either!
Mint.com is an excellent source of tracking your financial status, budgets, and spending habits. It also emails you reminders about upcoming bills that are due, when accts reach a certain high or low, and a weekly snapshot of your financial picture. I love it!
I’ve also worked with all my bills/payees to get my due dates to be as close together as possible, currently all about the 15th of each month, give or take a few days.
Finally, I have taken to paying my bills almost as soon as I get them. With credit cards that you do have an interest rate on other than 0%, this does help. The interest is calculated on your average daily balance. So, if you can make your payment as soon as the bill comes out (this is why online access is so awesome), you can save a small amount in interest charges each month since by paying the bill right away you reduce the total balance owed on the account and therfore the amount the interest for the following month will be computed on. Makes sense!
Hope that helps!
Does your gas company report to the credit bureau? If so it will show as a late pay. I’m not sure if you make a partial payment on time and the remainder late, how that shows on your credit report.
This is my first comment although I’ve been inspired by your blog for a while. As well as you’ve done in eliminating debt, I’ve always been impressed by the fact that you don’t use automatic EFTs to pay your bills. I can’t think of any better way to stay on top of personal finances during hectic times.
For credit cards, I have them set for the minimum. I make extra payments on top of the minimum, but it’s at my leisure. My gas bill and electric bill (which I have averaged throughout the year for the same monthly amount) are both automatically withdrawn, too. Cell phone and student loans, too. Everything.
Bill pay requires action on the payor’s part. EFTs require a little bit of monitoring/tracking, but you can rest assured that the bills will be paid on time without any vigilence on your part. No late fees, and no lost 0% APR.
The EFT method requires a simple list of accounts, amounts and due dates for all bills, so you can see at a glance when the amounts will be withdrawn. A little cushion in the checking account is a good idea too, or a small line of credit in case of a tracking error.
Give yourself a mental break, and make your bill payments automatic!
I have come face-to-face with the realization that I have to suffer the consequences of my actions. So, when I come home and realize that I am really tired, that I have to work on my consulting business, that I need to spend time with my family, update my finances, etc., I have to sit back and remember that these are consequences to the activities I have chosen in my life. Nobody else is there to bail me out, nor should they. So, I buckle down and get things done.
The other thing that helps is that my spouse is willing to pitch in with the finances. I know you have posted about this in the past, but the stress that keeping up with your finances should be a topic of conversation. If having spousal help with your finances isn’t something that can happen, then prepare yourself to face the consequences of that decision.
I have 2 credit cards with low interest rates that I am hoping to finish paying off this year. I send a payment every week. (I get paid weekly) I also call my credit card companies on my lunch break every Monday to find out the minimums on each account.
When I pay my credit card bill, I make a note in my planner for the next month, a few days BEFORE the next payment is due, to pay the next one. I also place a reminder on the exact day it is due. I use my planner everyday so that works well for me. Even when I’ve lost track of the days (I’m a grad student) and don’t realize it’s the end of the month I will see that little note and it will surprise me sometimes, but then the ill gets paid! If, by chance I miss the first note (placed 3-4 days before it is due) I’ve got the one on the actual due date just in case…
I find if I spend just a few minutes on it every day, I’m able to keep on top of things without getting burnt out. I keep a spreadsheet of all of the bills that need to be paid out of each check. Then day after payday, I check to make sure they’ve all been sent out, and change the font on my spreadsheet from red (not paid) to black (paid). With my bank’s online bill pay, I’m able to set up payment for bills weeks in advance, so once I get the bill I immediately set up the payment for it and note on my spreadsheet that it’s done. This isn’t fool proof, tho. Just this morning I noticed a transfer I was expecting wasn’t there, despite having noted it on my spreadsheet. Lo and behold, I hadn’t actually set it up. D’oh! Still, despite human error, it’s a pretty good system.
This will be much more relevant once I start trying to make money using 0% interest rate credit cards, but for my current card I get an email with my statement and I star it in gmail. I check my starred emails once a week and pay other bills that way as well.
At work when I have important meetings or deadlines I enter them into microsoft outlook and put alarms on them to remind me a day or two in advance.
I started using mint.com previously after it was suggested to me by my roommate, however, I stopped using it after they couldn’t track my MMA. Mint sends reminder e-mails when credit card payments are due, which I continue to receive.
I also remember reading about a service on mymoneyblog.com where you can get text reminders, which might be convenient for some people to remember payments.
As for trying to stay focused when everything around you seems like it’s going 100mph, I recommend having a nice cold beer and relaxing for thirty minutes. Works like a charm!
Like Sharon, I set up automatic payments. For monthly or quarterly bills, I transfer money to a holding account each pay day and then the payments are set up to be paid from the holding account three days before the due date each month. I have my rent, electricity, phone, union fees, gym membership, credit card, almost everything set up to pay automatically. I really like it because I don’t have to remember anything. Every few months I take stock of how it’s going and make adjustments where needed, but mostly my fortnightly budget is about the money that’s left over.
I have to agree with Gay. I set up to my bills every Thursday morning with my bank’s Bill Pay. This way they automatically go out on Friday night. No hassles.
I also have a spreadsheet on my computer. Take the bills rec’d in the mail from the night before and log them first thing in the morning with the ‘date due’ and the ‘day to be sent out’. It allows me to tally the total (so, I can cry early). :)~
Hi, I have been reading your personal finance blog for a long time now and I just want to congratulate you on how well you have done. You have been a big inspiration to me and as for today, I just published for the first time, my own personal finance blog, which I invite you to come over and read. You are very dedicated to paying off your debts and I really commend that! Hope you have a wonderful day! ~Maria
I completely understand life being so hectic you forget to pay the bills— my father passed away in June, and I’ve been inundated with the expenses from that. I find myself paying HIS bills and being absent-minded about my own in the process. This is compounded by the fact that he failed to change me (his only child) to beneficiary on his life insurance after my mother passed away 8 years ago, and the original of his will is who knows where. On top of this, his house flooded due to a plumbing problem the month before his death and had to be gutted. It has to be renovated before it can be rented or sold.
So I am pretty much paying his mortgage, utilities, repairs, funeral and attorney fees out of my pocket (that lovely emergency fund). The good news is that I was made administrator of his estate last week, but it will be some time before I can collect on his life insurance.
So, Tricia, perhaps that might be another blog topic for you— how do you make sure you have your estate, however small, set up so that it does not cost your heirs dearly? Make sure that will is up-to-date and easily found. Make sure you update policies regularly. Make sure you have a Power of Attorney assigned, and an executor. It’s been a real eye-opener, all this. The emergency fund came to the rescue, but it’s gone dry now. My billpaying spreadsheet has lapped over into 2 pages!
Around the 4th of every month I go online and set up all the credit card payments. At this point I can’t pay them all on the 4th but I do get them all scheduled so I don’t have to worry about them.
I can’t tell you how much of a relief setting up my credit card payments online is to me. I no longer worry about what day it is, what’s due when, or worry about loosing a low rate over an innocent mistake.
We just had the stress of my computer dying, and that unexpected expenditure really leads us to a heck of a pickle as we prepare to move overseas.
Well, at least it seemed to until we thought about the potential costs if the computer had died AFTER we left the country. Computers are about 4 times as expensive where we are moving, so it was a good time to have that happen, comparatively speaking.
We have no insurance that life will be easy, especially financially, but trying to look on the bright side and just maintain focus really helps me to toe the line when things are tougher.
Jerry
Perhaps this is a good example of why you shouldn’t shoulder 99% of the financial work and responsibility in your household. It’s great that you’re the more administrative person and that you’re more gifted in terms of financial management. I’m not saying you need to split writing the checks and everything else 50/50 with your husband. But, if he took more responsibility, then you’d have two heads managing deadlines and all of this information. At the very least, he could spend 15 minutes every week or two going over a high-level view of the finances and double checking what you’ve done, deadlines, etc. This also has the added bonus that he’ll then have a clue if anything ever happens to you.
I do this all the time which is partly why I really need to get a good budget going. For example, this month I paid a lot of extra on my credit cards. I did not pay attention to the fact that my gas bill, water bill, and cell phone bill were due. Now I have to leave those for my next check. (Wednesday)
This is a dangerous way of living because I am afraid I will slip back into using credit cards if I am not careful.
I almost lost our 0% interest rate, on the very first payment! Boy did I feel stupid!! They did actually increase the rate for one month, but dropped it back down when I called again to ask them why they hadn’t, as they had promised they would.
I am right now at a point where I’ve lost focus very badly and am almost afraid to look and see where we are. But I must, so I will.
Good save, Tricia!
I have discovered a good way to avoid missing the monthly payment on my credit card. Make the small “minimum due” payment about 7-10 days earlier that the due date (use your online banking for this), then make a second larger payment two weeks after that. You are making a payment every two weeks this way. One of those payments will always count as the “next months” payment. Plus, the credit card company has to pay someone to process the extra payment! haha
I have found that by taking about 20 minutes everyday too browse through my online accounts real quick, I get a good grasp of where I stand and when my payments are coming up. I started using MINT.COM about 3 months ago and this online financial management tool totally consolidates all of my accounts into one and provides me with alerts and transactional analysis tools as well. Its great and has increase my efficiency in respect to my own personal finance!!! Be easy!
I know it’s been mentioned here already, but online bill pay and automating bills is the way to go. I used to forget to pay the mortgage and scramble to get the check out some months. I hated that feeling, and setting up bill pay is easy and automates the process. Don’t spend money on those automated services that some mortgage companies use, as they just make money doing the same thing online banking offers.