Oh! What you can learn when you read your bills. It is one of the first steps you need to take to get your finances order.
Embarrassing confession – I used to pay very little attention to my bills. I would check that my payment was received and that the amount due was in the ball park, but very little beyond that. When I decided to get serious about my messy money, I did a thorough review of all my bills and I was surprised by what I learned.It is common sense, right? It makes sense to READ the bill you have been sent. But there is a psychological barrier to facing reality, and I used to approach my bills with either dread or indifference. Bills were bad news, a chore and complicated. Knowledge is power, though, and the more I scrutinized my bills, the more opportunities I found for savings and ways to simplify my finances. Now I read ’em till it hurts.
My approach with all household bills:
- Verify that payment was received. This is key to ensure that my account does not fall into past due status and accrue late/interest charges.
- Compare amount to previous bill.
- Is it higher or lower, and if so, why?
- If the amount has increased, do I need to make adjustments to my budget?
- If the amount has decreased is it a sustainable decrease? What can I do to replicate those savings?
The Bill Deep Dive:
It has been worth the effort to check my bills and really understand how I am being billed and what I am being charged for. Things I review during a deep dive:
What time frame am I being billed for? 30 days, 180 days?
- Is this billing frequency working for my budget and if not, can I change it? Cash flow is important and I have found that by changing billing frequency, I have been able to balance my inflow and outflow of money.
- This also goes for due dates. I had a bill that always seemed to come due the day before payday. I asked the company to permanently adjust this date so that it aligns with my pay schedule.
Is this bill on a budget or instalment plan?
- Some companies offer budget plans, where you are billed a constant amount, every month, over the course of a year based on an estimate of annual usage. This type of billing can help smooth out billing months where usage may be higher due to seasonal factors (i.e. Winter heating.)
- I ask myself if the estimates they are using align with actual usage, and if not ask that they adjust. I would prefer to be balanced at the end of the year and not have a large deficit or leave the utility company holding on to my money.
- I also check if there is a fee for the budget plan. My car insurance company charges 3% on a monthly plan (insane!!!) but only $5 for three instalment payments, so I opted for instalments to cut my insurance costs.
Are there service charges or fees on my bill?
- If so, what are they for, and how can I eliminate them? I call the billing company and ask for this information and ask for tips on how to avoid them in the future.
- Sometimes, new fees are introduced and buried in the fine print. Sometimes the fees are a billing mistake. Sometimes fees are a legitimate charge, but I need to understand what I am being billed for.
Am I in the right price package?
- TWICE my phone company introduced new service packages that were less expensive than mine and offered all the features I needed. They did not pro-actively let me know that there might be a better offer for me and as a result I was paying more than I needed to. Oh the injustice! I keep an eye on prices now and adjust if needed.
It sounds like a lot of work and maybe it was in the beginning. Now that I have a good understanding of my bills I can spot potential issues easily and act early. It has been worth every ounce of effort and it helps me feel like I control over my bills, they don’t control me.
Thanks for visiting.