If you have read the book Rich Dad Poor Dad by Robert T. Kiyosaki and Sharon Lecter, you will recall the author’s advice, on how to become rich, and their one easy hack was to simply postpone your bill to payments to the due date.
This is the easiest advice to follow, which we all instinctively follow, and still don’t become rich. Do you know why while we follow the advice and in doing so, we, on the other hand, miss the due date and instead of saving money we end up paying more?
We are all used to paying our utility bills and we all have faced the frustration of forgetting to pay a bill and then having to pay a late fee on that. It’s frustrating, and it’s not new. It used to happen when we used to pay bills offline and it still happens even when we pay bills online. Is there any way of overcoming this menace.? In fact, is a way to completely eradicate this problem and overcome the losses we are incurring each year. Here we list some ways to overcome this problem for good and take a step toward becoming rich.
Pay Bills on time
We do not disagree with the advice of the authors of Rich Dad Poor Da, in fact, we are a strong votary of the same. You see if you pay your bills too much in advance you are technically losing the opportunity to use that money elsewhere, also called opportunity cost or poor cash flow management.
However, If on the other hand, you pay your bills too late you risk missing the due date, leading to a late fee penalty. While it is true for all bills but in the case of a Credit card, you risk not only a late fee but also interest on the outstanding amount.
So what Is the best way to not pay bills too much in advance and also not pay the late fee? Well, our advice is that firstly you use a Finance Apps that allows you to set reminders for dues. So, before you do that make sure you have signed up for SMS or online reminders. These apps use one of these sources to remind you to pay your bills. One such app is the Walnut App; it gives you reminders for all the bill payments and you will never miss the date.
Automatic Bill Updates
One way to never miss the due date is to use the reminder service of the Online Bill Payment apps. You must be familiar with payment apps like Paytm, Google Pay, Amazon Pay, Mobikwik, Prune, and some more. These apps have now an in-built feature. These apps use the Bhart Bill Payment aggregation system, where most of the billers in the country list their services. Once a new bill Is generated the billers send the new bill information to Bharat bill and if you have used any of the payment apps listed above to make that particular bill payment, they will send a message for the bill you last paid for using their app.
So, the Payment apps are not just a great way to save time and effort they all automate the bill payment process. While we say that, keep in mind to open the app and check for unpaid bills or look out for SMS from these apps of new bills generated. An app that combines bill payment and Reminder works best, something like Prune.
Setting up Automatic Bill Payments
Standing instructions have always been a great way of not missing the bill due dates but with revised guidelines, this process has undergone a change. Earlier there were two ways to create standing instruction, either through your bank account or through a Credit card. Now you can also create a standing instruction through a Payment App as well.
So, while you are making a payment for your bill, it will ask you to automate that particular bill, if you check that box, you are all set for automatic payment. However, there are some conditions. Other than the fine print, the two main conditions are, firstly it is linked to your bank account through UPI and secondly, the amount should be less than Rs. 5000.00.
Create a Check List
While we may live in a so-called digital world you still get some bills in the physical form. And if you are still getting physical bills, it needs to be addressed differently. We all know once we get a physical bill, we put it in a pile of papers and forget it. It is best to add these bills manually to our Calendar with a reminder date. Make sure to pay the bill on the first instance of that reminder. However, if you can’t pay immediately don’t stop the reminder, rather put it on Snooze. When you put the reminder never forget to add the name of the biller, the Amount to be paid, and the bank details of the biller.
In case of electricity bills, they give a small discount if you pay the bill, we feel we should utilize that opportunity and pay the bill before the due date.
While a late fee may look like a small amount but when you add up all the late fees you would have paid over the year, you will be shocked to realize that it may amount to one month of a phone bill or any other utility. So essentially if you save on late fees, you could potentially save one month’s phone bill.
If you check the earnings of a credit card company, you will see that almost 3 to 4% of their profit may be coming from late fees. So don’t be fooled, all the utility companies want some of their customers to pay their bills late, don’t be one of those customers.