Thursday, November 1, 2012
Better Bill Pay in 5 steps
1) Electronic bill pay: Examine all the bills you're paying via checks or mail. Can it be faxed? Can it be paid electronically? Can you place it on autopay, and your bank mails the check for free? Are your student loans on autopay? You should get a 0.25% interest rate discount if you place them on automatic electronic payment for government loans. 250K loans at 6.8% over 30 years with a monthly $1630 payment comes to a total savings $40,000 and 27 fewer months.
2) Personal bill pay: Are there any bills that you can pay in person? This is much more likely to be effective at a local organization like a church, synagogue, landlord, or small doctor/dentist office than a larger organization that has its billing off-site/out of state. Combine it with a grocery trip and stop buying stamps.
3) Confirm your address: Make sure that any correspondence that needs to reach you has an appropriate forwarding address available. Bizarrely, the post office charges to do address changes online so ask for the paper forms. Then fill them out for any address you have moved for the last 5 years. Mail forwarding only works for one year and then needs to be renewed.
4) Consolidate/phase out your email accounts: If you have moved jobs/graduated school, it is very possible that your email address is still receiving mail. I recommend getting a dignified name of some type on gmail and filtering all your email into that. Whatever you do; if an email is going to be shut down or essentially unused, set up the auto-email informing mailers of your new contact information.
5) Know how to access all of your accounts electronically and check them weekly: This way you will know if any strange chargers appear or if your scheduled electronic payment suddenly stops. Even better, be familiar with when your electronic payments are scheduled versus when you get paid to know when you can put aside extra money or make the extra payment.
Now onto our story. Our out-of-state condo is undergoing a re-finance that will remove that pesky first-time homebuyer residency requirement. Our renter pays into the local account and the mortgage and condo association dues came out of that account on autopayment. Unfortunately, the condo association moved to a new management company last year, but we were never informed because they sent that information to the condo itself (haven't lived there in 4 years) and HubbyJD's law school email account. The old management company forwarded our checks to the new company every once in a while, when they felt like it. Then they just stopped and the checks expired so the money was credited back to our account. HubbyJD finally checked that account and noticed the credits.
He immediately followed up on the electronic trail in his old email and found we about to have a lien placed on the condo we were trying to re-fi! I had also made an extra $1.8K loan payment THE DAY BEFORE. He contacted the mortgage companies lawyer and straightened things out - provided we pay everything immediately. Fortunately I knew exactly where we were in our monthly banking cycle to come up with an extra $1.5K that afternoon. Since I run the household finances, I immediately enacted steps 1-5.