Late Fees Kill Your Savings

My friend and I caught up on movies. He’s a big moviephile and loves every genre. Good reviews, bad reviews, it doesn’t matter to him. He’s been getting his fix from his local RedBox, DVD rentals for $1 a day. Sounds like a great deal and I’ve used them myself. However, he told me some disturbing news. He borrowed five movies in a day and had planned to watch them throughout the day and night. Life happened and a week went by. End result? No movies watched and late fees galore. If you add up the numbers, that’s 5 DVDs, 7 days, $1 each for a grand total of $35. He could have bought those DVDs outright for his own collection. This reminded me about other late fees.

Remind Yourself

Pick a bill, any bill. Personally, I have to deal with my rent, credit cards, and utilities. Others may need to also remember their mortgage, car, and cable. When I first moved, I was thrown off by the sheer volume. I have settled down by setting monthly reminders a few days before my bill’s due date. I selected a few days ahead in case of unexpected events. There were times when I cut my bill payment too close and I ran into a website being down due to maintenance. Give yourself ample time to pay your bill on time.

Automate Your Payments

My water bill is now being automatically deducted from my checking account. One less thing to think about, but you need to be diligent and check your numbers. Although your bill is being paid, you shouldn’t set it and forget it because it is up to you to catch billing discrepancies.

Time Is Money

If you go too delinquent on a cell phone or other utility, the company pay even cut your service. You will then have to scramble, explain yourself, and get your service reactivated. Besides burning valuable time, you may get hit with a reactivation fee as well!

Final Thoughts

Ten dollars here, fourteen dollars there, may not be much, but compared to your actual bill, that is a huge percentage loss that cuts into your emergency savings or retirement funds. Don’t forget, besides the late fee, if you miss a credit card payment, they will also slap you with interest. If you don’t change your mindset, you can only blame yourself for your debt not improving or your nest egg not growing. Make that change today!

Stay Inspired!

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20 Responses

  1. No Debt MBA says:

    This is absolutely true! I’m trying to avoid this in my own life by taking fewer books out from the library at a time and instead going more often. This gets me in the habit of returning books as soon as I read them and if I do mess up I have fewer books out to incur fines. I’ve also signed up for reminder emails from the library for when books come due. $1 in fines doesn’t seem like that much money but it is an infinite increase in the cost of borrowing books.

  2. MoneyCone says:

    I hate nothing more than late fees Buck! I feel your friend’s pain!

  3. krantcents says:

    I am always surprised how casual people are about fees. To me, fees are paying for absolutely nothing! It is a penalty or consequence for irresponsibility. Your friend might be better off with Netflix because of the flat fee and no late fees.

  4. I have all my bills paid automatically through my checking account. I just have to check to make sure that it is scheduled and that the credit has been applied. Otherwise, there is no data entry at all. Occasionally, the billing address will change when accounts are sold but that happens rarely. It works well for me. For bills that change from month to month like electricity, I simply pay online and input the amount.

  5. Paying late fee is like giving money away. There is no need for that. We haven’t had late fee for quite a while. I also automate almost everything and set up Outlook calendar for those items that need manual payment.

  6. Late fees suck! And it’s even worse when you compare the fee to the original cost. If a bank wanted to charge what late fees already do (50-100% of the original cost) there would be regulators all over them.

  7. Squirrelers says:

    Your post just reminded me of the pile of library books that I need to return this week. Overdue fines can defeat the purpose of reading books for free at the library!

  8. 101 Centavos says:

    Amen to that. Self-inflicted wounds are totally unnecessary.

  9. Dana says:

    That’s why the automatic payment is popular. 🙂

  1. June 13, 2011

    […] Buck Inspire with ‘Late Fees Kill Your Savings‘ […]

  2. July 4, 2011

    […] Avoid late fees to save money from Buck Inspire […]

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