How Changing Due Dates on Your Bills Can Help Shore Up Your Monthly Finances

Student loans are a huge burden but they don't necessarily have to be. It's possible to lower your monthly student loan payment with the right tips.

Nearly every financial adviser stresses the importance of creating a household budget, a practice that helps curtail spending and often prevents expenses from spiraling out of control.

If you’ve already taken this step and continue to struggle with the balancing act between monthly income and expenditures, it can start to feel hopeless. But there’s still hope: another approach to consider is changing the due dates of your bills.

It’s a tactic few people think to implement, but one that can help steady the monthly financial rollercoaster.

“Simply lining up bills with your income allows you to have a lot more control over your finances and where your money is going and when,” said Kyle Whipple, of Michigan-based C. Curtis Financial Group.

All you have to do is call up creditors, utility companies, or any other business in question and request a due date change. Most are willing to work with customers on this issue.

Still not convinced? Here are five ways that taking such action can improve your monthly finances.

1. Spread Big Expenses throughout the Month

Having multiple major bills (like mortgage or rent, car payments, daycare costs, and utilities) due at the same time of the month can translate into a serious cash flow problem.

Rather than be tapped out by paying several hefty bills all around the same time, try shifting the due dates for one or two bills to later in the month, after you’ve received another paycheck or two.

“Sometimes pushing one of those bills to the other part of the month allows you to have more cash flow on both sides of the month,” said Whipple.

2. Clarify Exactly How Much Free Cash You Have

Some people spend blindly—and when bills come due have little money left to pay them. To avoid such a scenario, arrange to have your bills due as close as possible to your payday. This also helps make it clear exactly how much free cash you’ll have to use for other things throughout the month.

“Lining up bills with your payday allows you to get that money out of your bank account as soon as possible, so you know how much money you have left for the rest of the month,” said Whipple.

In addition, rearranging your bills this way, especially when you’re living on a tight budget, ensures that the bills are a top priority, says Dawn-Marie Joseph, founder of Estate Planning & Preservation.

“The closer you can pay the bill to when you receive your paycheck, the better chance the bill will get paid,” said Joseph. “It’s just great discipline for yourself.”

3. Avoid Late Fees, Excessive Interest, and Lower Credit Scores

A 2017 study from the National Foundation for Credit Counseling reported that about one in five people (22%) do not pay their bills on time. And it’s no secret that paying a bill past its due date often involves a penalty in one form or another—whether it’s a late payment fee, an increased interest rate, or a lowered credit score. (You can check your credit score for free on Credit.com.)

“When people miss a bill, over time those overage charges or the interest adds up,” said Whipple. “Between that and overdraft fees on your bank account when you don’t have enough money there to cover a bill payment, it can be dangerous.”

Adjusting your bill due dates so that you know exactly when they’re due can help avoid overlooked payments or payments missed due to a lack of sufficient funds.

4. Eliminate Uncertainty about Monthly Due Dates

According to Whipple, most people pay bills when they get a notice that the due date is approaching and have no clue what the actual due dates are each month.

Requesting a specific date that you have decided upon, such as the first or the 15th of the month, eliminates such uncertainty. This helps you remember your due dates and pay those bills on time.

5. Prevent Unnecessary Credit Card Spending

It’s not unusual to reach for a credit card as a stopgap when living on a limited income or when your cash flow has run dry after paying bills. But it’s not a good long-term approach to balancing your monthly budget.

Rearranging due dates can help spread your bills out or align with paydays so that you have adequate cash flow to get by without relying on credit cards.

“If you’re on a single income or a tight budget, making sure you know when you need to pay bills is huge so that you don’t overspend and end up using a credit card,” said Whipple.

How to Request a Due Date Change

Most companies make it fairly simple to change a bill’s due date, even allowing customers to do it online. Many utility companies even call it out as an option on their websites.

“Most people don’t realize you have leverage to call up and ask to change the date,” said Whipple. “It doesn’t hurt to ask. The worst-case scenario is they say no.”

All that’s left now is to implement these tips and take control over your bill payments. Your wallet will thank you.

Image: Jacob Ammentorp Lund

The post How Changing Due Dates on Your Bills Can Help Shore Up Your Monthly Finances appeared first on Credit.com.

5 Tips for Splitting Bills With Roommates

Roommates can be great. Or a nightmare. Here's how to keep your experience as positive as possible on the financial front.

There are many benefits that come with roommates: the ability to rent a larger space, share cleaning duties, and easily find friends to watch a movie with. On the other hand, sharing a space with a roommate – or roommates – is not always easy and can bring on some challenges, especially when it comes to money.

Here are some tips to help you split the bills and keep the peace.

1. Establish Ground Rules & Guidelines

Just as your lease spells out every detail, consider working together with your roommates to create some ground rules or guidelines. This is a good time to discuss exactly which expenses you will be sharing and which you will be paying for individually.

A major key for keeping the peace is making sure bills are organized. Figure out when and how bills will be collected and split each month, how they will be payed, and who is responsible for paying what amount. While this may sound obvious, too many times roommates will wait until the last minute, causing stress, tension, and possibly late bills.

2. Make a Cost Spreadsheet

Once ground rules and guidelines are created for paying the bills, make a spreadsheet outlining each expense you and your roommates will need to pay. Each expense should show details such as due dates, the amounts owed, and the person responsible for paying. It may be wise to have a monthly meeting to discuss the bills and this spreadsheet. This will make sure everyone is on the same page and no one is surprised by a bill when it’s time to pay.

3. Use Apps

There’s always an app for that! When you have large expenses, such as rent or utilities, consider using an app that can help with the math and the payments. Gone is the excuse that a roommate “doesn’t have cash” on them as Venmo can easily solve that issue. This free app lets you send money from a debit account to friends. The app also lets you request money letting your roommates know that money is due.

Another great app is Splitwise. This app lets roommates track bills, tally who paid, and send reminders so you’re never late. If a cost spreadsheet is too old-school for you, consider using an app to make paying bills easier among you and your roommates.

4. Keep Some Purchases Separate

Unless you and your roommates plan on selling everything when the time comes to move out, consider buying furniture separately. While it may sound logical to split furniture costs that you both will be using, what happens when your lease is up? Deciding who gets to keep what can be stressful and problematic. Consider making a list of furniture and electronics necessary for your place and figure out who will be responsible for each item while keeping your overall costs even.

Like furniture, groceries are another item which roommates should consider buying separately. If you love to eat fresh foods while another roommate loves frozen pizzas, splitting the costs won’t exactly be even. This also creates controversy when your roommate decides they want fresh food that day and indulges in your groceries.

5. Choose Your Roommates Wisely

Obviously you won’t want to live with someone who you’re going to constantly clean up after. You also won’t want to live with someone who will never pay their share of the bills. Doing so could end up hurting your credit, especially if they skip out and you can’t afford the rent on your own. You may want to request that they check their credit scores and you can do the same. That way you’ll know what their history of paying bills is like (you can get your credit scores for free on Credit.com).

While it may be hard to know your possible future roommate’s habits, at the very least, consider meeting with them beforehand so you can feel them out. You won’t want to be stuck in a lease with someone you’re going to regret living with.

Image: martinedoucet

The post 5 Tips for Splitting Bills With Roommates appeared first on Credit.com.

4 Easy Ways to Stay On Top of Your Bills

Forgetting to pay your bills happens. Here are some ways you can make sure it doesn't end up costing you.

Life comes with daily distractions. As a result, your bills can sometimes slip through the cracks. If you’ve ever missed a monthly bill payment, you’re not alone: A quarter of all Americans end up making late payments.

Paying your bills on time is important for more than keeping your lights on. Late payments can remain on your credit report for up to seven years, negatively affecting your credit score (Check two of your credit scores free on Credit.com). If you have trouble staying current with your bills, you may need to get organized. Here are four ways to do so easily so you can stay on top of your bills.

1. Keep Your Bills in One Place

You may receive and pay your bills online, through the mail or via a mix of both. But if you don’t keep your bills in one place, it can be easy to lose track of them. Paper bills can be lost in the mail or accidentally thrown away, and emailed bills can wind up buried in your inbox.

To stay organized, you may want to standardize the way you receive bills by choosing electronic or paper bills for all your lenders and suppliers. Then, you can keep all monthly bills in one place as you receive them. A bill tray on your desk or a folder on your computer should suffice. If you continue to receive a mix of bill types, you can still put them in one place by printing or scanning them.

2. Set Reminders

How often you pay bills is up to you. You may need to review and pay bills weekly, biweekly or monthly, depending on factors including your paycheck schedule and bill due dates. To keep yourself honest, you can mark recurring calendar appointments for bill payment and set reminders. Automated phone and email reminders are simple to set up, or you can keep track on your wall calendar — whatever is most likely to help you stick to your schedule.

3. Set Up Automated Payments

Many service providers and lenders offer automated payments that pull funds from your account at predetermined times. Many companies offer small discounts for participating in automated bill pay. You need a sufficient bank account balance to cover your bills, so this feature may not be right for you if you’re living paycheck to paycheck. If you are confident in your bank account balance, automated bill pay provides a hassle-free way to pay bills.

It’s also possible to auto pay bills with a credit card. That can be a benefit if your payments allow you to earn points or cash back, but only if you don’t carry a balance.

4. Adjust Due Dates

Some monthly bills, especially credit cards, let you adjust your due dates. You may wish to schedule your bills to be due on the same day so you can remember to pay them all at once. Or, you may wish to stagger them throughout the month for cash-flow reasons.

If you adjust your due dates, make sure to adjust any calendar appointments or reminders accordingly.

There are many online bill management solutions, both free and paid, that can help you with some or all of the above tips. So, if you think you need more help managing your bills, bill management software might be the way to go.

Image: Geber86

The post 4 Easy Ways to Stay On Top of Your Bills appeared first on Credit.com.

6 Ways You Can Wreck Someone Else’s Credit

wreck-someone-else's-credit

You do a lot to make sure your credit is in decent shape. More often than not, you’re paying your bills on time and you do your best to keep your debt utilization ratio where it should be (experts recommend keeping your debts at 30%, ideally 10%, of your total credit limit). So, when you check your credit scores — you can see two of them for free on Credit.com — you usually see the positive results.

But what about the time you slipped up and forgot to pay a few bills? Or moved without giving your roommate that last rent check? These things may not be showing up in your credit history, but they could be damaging the credit of others. Here are six things you could be doing that could destroy someone else’s credit, whether you realize it or not.

1. Not Paying on a Co-Signed Loan

You know that shiny set of new wheels you got when you graduated, thanks to Mom or Dad co-signing an auto loan with you? When they put their name on the dotted line, they guaranteed they’d pay the debt if you didn’t, even though it was deemed your responsibility.

If you were late on a payment for a co-signed loan, even if you eventually sent in the check, that has consequences for the co-signer. If the loan was ultimately written off, that means your co-signer took even more of a hit. If you’re going to be late, or can’t make your car payments, it’s a good idea to talk with your co-signer to see if they can cover you so you don’t get hit with late fees and they avoid seeing any damage to their credit. And you certainly don’t want to skip out on paying altogether.

2. Racking Up Debt as an Authorized User on a Credit Card

Having an authorized user is a risk that can backfire if they run the charges over the assigned limit or run up an unmanageable balance, leaving the primary cardholder to deal with the consequences that include a damaged credit rating,” according to an email from Bruce McClary, vice president of communications for the National Foundation for Credit Counseling.

Authorized users aren’t held accountable for paying the balance the same way the primary user is — and that spending is also reflected on the primary account holders’ credit. So, if you’re racking up charges, it’s affecting their debt-to-credit ratio, which makes up 30% of their credit score. It’s a good idea to talk about expectations for spending and repayment before becoming an authorized user, but if you already are one, it doesn’t hurt to have that conversation now.

3. Not Paying Your Portion of the Rent

If your name wasn’t on the lease, you may not have heard about that last rent check never making it to the landlord. Or you may not have given the money to your former roommate before you headed out of town. No matter what the situation, not paying your portion of the rent could be damaging for the person whose name was on the lease. Your former landlord could notify a consumer reporting company, like RentBureau, about the missed payment or could even go directly to the credit bureaus, which could ding the lease holders’ credit.

4. Returning Library Books Late (or Not at All)

Doing this on your own card can be damaging, as the late fees can potentially send your account to collections. But doing this on someone else’s library card can have the same effect, only that would lead to a debt collector knocking on the library card owner’s door (figuratively speaking). If you borrow someone’s library card, all you have to do is make sure you’re fair and return the items you borrow by the due date. And, if you just couldn’t finish reading that book in time, go in and pay the fine — it’s usually just a few cents each day you’re late.

5. Bailing on Shared Debts After a Breakup

If you’ve been sharing the responsibility of paying a loan — whether for a mortgage, car, student loan or something else — and then something ends the relationship, that won’t end the debt. Same goes for shared credit card accounts, but if only one of your names is on the account, despite who you’ve deemed in charge of paying. Communication is key here. You don’t want to wait until a past-due notice shows up in the mail, alerting your ex that you aren’t paying their debt and have harmed their credit in the process.

6. Getting a Ticket in Someone Else’s Car

Whether you get a ticket for speeding, a parking violation, running a red light or something else, it’s your mistake. However, if you do this in someone else’s car and don’t pay the ticket, your mistake will cause the car owner’s credit to suffer, not yours. The debt may not even be on the car owner’s radar until it reaches collections or receives a judgment. As if that isn’t bad enough, the owner of the vehicle could see their car insurance rate skyrocket because of all this, too.

Image: orbandomonkos

The post 6 Ways You Can Wreck Someone Else’s Credit appeared first on Credit.com.

Why Credit Makes People So Freaking Mad: A Theory

mad_about_credit_scores

No one really likes reading about credit, credit scores and credit reports. As editor of a publication devoted to teaching people about these things, it’s a fact that I’ve had to learn to live with, and it’s not a surprising one. There’s plenty for people to get mad about. Credit is confusing, credit report errors can be hard to fix, and the whole business is generally considerably less fun than watching a kitten escape from one kennel into another one occupied by his/her puppy friend.

I think there’s more to the story, however. There’s often a disconnect between the credit business and the people they report on and score. It’s not that people don’t understand the value of credit reports and scores. They get it. If you haven’t paid some of your bills in the past, banks will think that there’s a greater risk that you won’t pay your bills in the future, so they charge you higher interest rates. It makes sense, and all things being equal, you might understand why, from a bank’s perspective, credit scores are really all about accountability. Except all things aren’t equal.

Credit’s Not a Two-Way-Street

The credit business is a one-way street. Banks can penalize us for failing to pay our bills on time, but what happens when a bank — or any business for that matter — fails to deliver on promises it has made to us? What’s our recourse?

This subject came up in a recent Credit.com editorial meeting. We were discussing a story from Consumerist about a reader who was owed nearly $1,800 by Comcast for almost two years. They wrote:

“Nearly two years after Consumerist reader Robert shut down his business-tier service with Comcast, he’s still fighting with the nation’s largest broadband provider over a $1,775 early termination fee that should not have been assessed. Comcast even admits the money shouldn’t have been debited from Robert’s bank account, but now says it’s his responsibility to sort the mess out with his bank.”

So, Comcast reportedly admitted that it owed him the money, but rather than pay him, the cable company decided to direct the consumer to enlist the help of his bank to try to get the money from them — however that might work. The dispute dates all the way back to 2014, and according to the story, Robert endured multiple rounds of back-and-forth with Comcast before learning that he would ultimately have to try to force them to pay.

The Consumerist reporter, Chris Moran, reached out to Comcast for comment, and they told him “through some error the refund check never generated,” and that a new check would be received within 7-10 days, though they’d reportedly issued similar explanations and guarantees in the past (before telling Robert to ask the bank to help him get his money back). Which brings me to my point …

Let’s assume Comcast does send Robert his money. (I reached out to Comcast, and a spokesperson confirmed that the check was cut.) Let’s say they were to even pay him back with interest (which, if compounded monthly at a 20% APR— not an unreasonable penalty rate— would add up to about $2,639.27 over 24 months … it gets worse for them if you start assessing monthly late charges, too). That’s all fine and good. But what will the long term consequences of this behavior— which arguably demonstrates a high likelihood for default of one form or another in the future?

Well, of course, there are no consequences. And that, my friends, is why people tend to get so angry about credit scores. Because one little late payment by me or you can mean years of higher interest rates (try out this lifetime cost of debt calculator we put together if you need proof), but a company can hold onto your dough for years, and the only consequence for them is that at some point a reporter might shame them into paying you back.

We’re All Creditors

When you think about it, we’re all creditors. We buy goods and services— like cable, cell phone service, internet, etc.— and big companies deliver those services to us. When they fail to do that effectively or at all, we become creditors. We’ve essentially given them money for services they haven’t delivered.

Case in point: My internet service provider/cable company. For the past few months, the internet in my house has been slow and at times, non-existent. How bad, you ask? Let’s ask my 8-year-old daughter how she feels when she can’t watch “Liv and Maddie” on Netflix (this happens about every other day).

“It’s annoying, it’s frustrating and I don’t like it,” she says. “If I have to, I will go to the cable company.”

They don’t want that.

Here’s the thing, if I was slightly less lazy, I’d be on the phone with said ISP and lodge a complaint. I haven’t done that because, as I said, I’m lazy, and beyond that I’m reasonably sure no improvements will come of it (unless of course they manage to up-sell me to their faster service. In addition to being lazy, I am also cheap). But in this case I’m willing to just suck it up. I reckon I’m missing out on about 5% of my service, give or take (though a whining 8-year-old can make it seem like 25%).

I could, I suppose, withhold 5% of my bill payment, in lieu of services not rendered, but the ISP would just carry that balance over to the next month, I might get hit with finance charges, and ultimately, my failure to pay that amount could result in my credit getting dinged, and I might end up paying more for goods and services in the form of higher interest rates as a result.

But do the service providers of the world suffer similar consequences when they fail to deliver or, as was the case with Comcast, allegedly withhold money from a consumer? No. There’s no algorithm that takes this information in and translates it into a score that can impact their bottom line, as credit scores do with us. (You can check your free credit scores, updated monthly, on Credit.com, to see how your bottom line is being affected.)

That, I believe, is one of the biggest reasons why credit seems to make people so mad: Consumers are held to one standard, and companies to another.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More Money-Saving Reads:

Image: sturti

The post Why Credit Makes People So Freaking Mad: A Theory appeared first on Credit.com.