Bill always pays his bills on time.

Fact: Paying the bills is the least enjoyable thing to do, ever. Period.

Fact: You kind of have to do it anyways.

Fact: It’s REALLY important that you do, seriously.

If you’ve ever seen Lock Stock and Two Smoking Barrels, you’ll know that not paying someone back has serious consequences. For those of us who don’t enter high stakes card games, not paying for our expenses on time can still have negative implications. If you don’t learn to be punctual with payments now, you’re screwing yourself over in the long run.

To put this into perspective, let’s look at the outcomes of some scenarios where bills are paid late:

Mortgages: If you are less than 15 days late on a mortgage payment, you’re in the clear, but after that, you will receive a late fee. After 30 days, things can get even more serious. At this point, your late mortgage payment will affect your credit score directly, and this, my friends, is one step closer to home foreclosure. Uh oh spaghetti-o.

Credit Cards: Creditors are less sympathetic when it comes to late payments. Unlike mortgages which allow a 15 day grace period, credit card late fees can be implemented a day after money is due. Some credit companies will charge interest on the money owed, often with a rate as high as 29%.

Utilities: Payment options for electricity and water vary from city to city. Look on the website of your utility provider for late penalties. After not paying for a certain amount of time, you are at risk of your provider terminating all services. No heat / AC, water, electricity, nothing!

Student Loans: This also varies depending on the province. In Ontario, students have a six-month grace period before they are charged interest. The quicker you pay the loan, the lower the interest rate. The OSAP site has a Repayable Debt calculator so if you’re an Ontario post-secondary student taking out loans, you may find it helpful.

Credit delinquency—not paying off credit on time—is on the rise. There has been a 24% increase across Canada of late bill-payers and an increase in missed payments as well.

When I talked to Jeremy Kroll of A. Farber & Partners, he outlined the ways that poor handling of bills can lead to serious money problems, bankruptcy being the worst case scenario. Check out parts 1, 2, and 3 of the interview and this article outlining a few simple steps to managing your expenditures effectively.

Okay, enough downer talk, here’s a heartfelt duet by George Bush and Gordon Brown to lift your spirits.

Makes Cents (7)

This entry was posted on Tuesday, August 18th, 2009 at 1:00 pm and is filed under Living, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Tags: A. Farber, credit delinquency, Credit Scores, Debt, Jeremy Kroll, Lock Stock and Two smoking Barrels, Mortgage, Recession, Romi Levine, Screw You Recession, Student Debt, Student Loans, Utilities