Dirty Little Secret

There’s a dirty, little secret we all share but no one talks about unless s/he feels s/he has been charged unjustly.  Then, oh then, the whole world’s gonna hear about it.  And that secret is being hit with penalty fees: late fees, overdraft fees and over-the-limit fees.  I believe we can easily rise above them by just a little, clean organization.

Late fees are simply those fees tacked on to our current amount owed because we were late- in returning movies or games, in returning library books, or payment of services or purchases.  These fees vary per state, but depending on the business, the fees can be as little as a few dollars to $39 dollars or a maximum of 10% of the balance, whichever is greater.  This means it’s possible I’ll pay an extra $39 just for being a day late with my payment!

Over-the-limit fees are those fees charged by banks and credit card companies for making a purchase that will cause our current balance to be greater than our credit limit.  It’s not as commonplace since the new law went into effect in 2010, but we still need to be aware.  Under the new law, we are supposed to be notified at the time of purchase if it will result in our being over our credit limit.  We then have the choice to opt-in on the fee.  “After you consent, the credit card company must provide you written confirmation of your agreement before it can charge the fee.  The credit card company cannot require you to agree to over-the-limit fees but it can ask if you would like to participate.” (copied from Help With My Bank.gov) 

But…really?  C’mon….Now that you know what these fees are, have seen them in black and white, can you now see just how crazy they are?  Stop giving away your money.  And every time you choose to be late, you are choosing to give it away!  Did you know that?!  Every time you choose to opt-in for an over-the-limit fee, you are choosing to give it away!  It is absolutely time to STOP the insanity!  Just…STOP (and breathe).  LOOK at what you’re doing and LISTEN to your own voice of reason.

As I mentioned above, breaking the cycle of our dirty, little secret takes just a little, clean organization.  First, I recommend setting up Auto-Pay for all of your regular monthly payments.  There’s really no reason for you not to do so.  No excuses; just bite the bullet, set them up and make sure the money is in your account.  If you have to sacrifice a little something now- even if you have to eat Ramen noodles the rest of the month- you will be so much further ahead next month, and every month thereafter that you’re not paying late fees.  This will break the ‘rob Peter to pay Paul’ cycle.

Second, use your cell phone’s calendar function to input all due dates.  I suggest using it for even your regular monthly payments at this point…until you consistently have the money in your account.  If you are using online bill pay, either set a reminder for 7 days ahead of time or schedule the “appointment” 7 days sooner.  This will ensure timely payment to your creditor and you will thus avoid any late fees.  If you’re mailing an actual check, be sure to set the reminder for at least 5 days.  I have no idea why it takes longer for bill pay to reach its recipient, but it does.  Or at least my bank’s does.  If you choose the “Recurring” option with no End Date, you only have to do it once, and it’s in there forever. 

For other due dates like movies, games and library items, I recommend setting an “appointment” 12-18 hours minimum, before the item is due.  This, too, will break the ‘rob Peter to pay Paul’ cycle.  But be sure to back up your phone so you will always have the appointments even if you lose your phone or it dies!  If you’re not sure how to set up the appointments or how to back up your phone, ask your kids; they’ll know. 

Third, just say NO.  Just say NO to a purchase that’s going to put you over-the-limit.  Unless it’s for gas to get you to and from work, it’s just not worth it.  If those item(s) are really something you need, you can always go back and buy it when you have the money to do so…and you’ll be further ahead since you’re not paying that fee.  If you struggle with having enough money in your account when the due date comes around, then I suggest you say NO to any spending that isn’t a need, for now.  Don’t worry…it won’t be forever; just for a month or two until you’ve built up enough for the ‘in between’ times.  We’ll talk further about that next week when we discuss checking accounts and overdraft fees, but for now you just gotta say NO.  You’ve got to, to Stop the Insanity, to break that ‘rob Peter to pay Paul’ cycle.

 As you go through this next week, ask yourself these questions:

1. Have I been paying unnecessary fees because I’m not as organized as I could be?

2. Have I been paying unnecessary fees because I should say NO more often?

3. What is one thing I can do today to change that?

 You can do this!  Take it one step at a time, one deadline at a time, and you will see your finances and your life just getting better and better!  I guarantee it.

Decide today that you are tired of being a casualty of disorganization and of being broke, and do something about that.  You can do this! Because the Truth is getting organized is actually a lot easier than we think it will be.  All it takes is for us to begin, from where you currently are.  “The journey of a thousand miles starts with a single step.”  -Lao-tzu, The Way of Lao-tzu; Chinese philosopher (604 BC – 531 BC)

Live Victoriously!
Olivier M. Verne
MyMoneyMaster@ymail.com
(c) 2011, Olivier M. Verne.  May be used with permission.  All other rights reserved.

About the author: Olivier M. Verne, an author, editor, speaker, consultant and former Debtor Education instructor and monthly newsletter contributor, is single and lives in Miami, FL.  Additionally, being a consumer bankruptcy paralegal for nearly 14 years and a writer for over 20 makes Olivier uniquely qualified to write about this area of expertise and passion: personal financial management.

Olivier humorously shares this knowledge in a positive, fun, plain-English way that makes everyone want to learn and make the changes necessary to succeed financially.  Olivier’s readers learn how to conquer their fears about money, gain tools for responsible money management, and dispel the myths which keep them broke.  And Olivier is always just an email away, regardless of where you live.