Late Fees: Have you eliminated them all?

It’s not often that I deal with mundane financial stuff these days, but I was reminded yesterday that this is something a fairly disorganized person like myself needs constant practice at. You see, I received a small bill from the water utility company for about US$20 or so.

It was such bad timing that I simply filed it under “Things to Do”, and I forgot about it, until the due date had passed by one day. Woops! Yesterday I had to travel uptown to the water company to pay the bill. I noticed that in the Chinese writing on the bottom of the bill a simple statement saying that, for late payment a 10% surcharge will be added to the next bill.

Annoyed at myself for doing that , I realize that $2 isn’t big in the grand scheme of things, but to avoid late penalties, one has to be on one’s game, and organized. Still, a $2 late fee is much better than last year, when I spent six months paying a credit card bill in parts, instead of in one fell swoop. I could have saved much more than $2, more like $400; and that was despite having the money in the bank.

The root causes of late charges in my experience have been simply poor planning, and poor execution. Poor planning was looking ahead, evaluating the cost-benefit relationship between certain expenses being paid off slowly vs. quickly; and execution was failing to pay bills in a timely manner despite this being an easy and convenient thing to do.

In Taiwan, there is really no excuse for bill paying. The water bill I paid late could be paid in anyone of seven ways: at 7-11, at the bank, on MOD TV, via ATM, via credit card, standing order, and online, not to mention at the water company. Mobile phone payments will soon be possible, too. So, why did I plan poorly and execute sloppily? And how can I resolve to not do that again, esp. since this isn’t the first time?

So here are two suggestions that I have considered trying:

A. Use automatic calendaring

1. make a list of regular payments and bills and their due dates;
2. advance the date by one week or two to build in an appropriate safety margin; and
3. set up your Calendar software to remind you that it has to be paid (and the penalty, too!) for one week prior, three days prior, and on the final day!

B. Autopayments

Alternatively, set up your automatic payment so that you don’t have to remember at all. It’s quite easy to do that for all your bills! You can set up a credit card autopayment, or a standing order on your bank account, too.

So many bills: so many late fees!

Typical bills that may incur penalties or late fees include: all utility bills (phones, electricity, gas, TV, water, taxes – local and national), membership fees for schools, clubs, etc., community fees, credit card minimum payment or payment due dates, overdrafts, student loans, loan installments on houses (mortgages), car loans, secured and unsecured loans, insurance policies on property, family or cars, … the modern life includes a lot of payments that need to be made… make sure your list is complete and paid on time!

What late paying horror stories have you had? How did you manage to fix those bad habits? How much did it cost you?