Budgeting, Personal Finance, Saving Money

8 Reasons Why You Need to Read Your Bills Every Month

The mail comes, you glance at your bills and drop them in the “To Be Paid” pile. Then, on the appointed day, you write out the checks or direct the online bill pay to do its thing and then you forget about it until next month. In the process of paying your bills, do you really read them? Do you look at all the inserts and read the line by line breakdown of what you owe? Do you look for anything that seems odd? If you just pay your bills on auto-pilot without reading them thoroughly, you may be wasting money that you don’t have to waste. What should you look for? Here’s a list.

Fraudulent charges: Any charge you didn’t authorize has the potential to be fraudulent. Sometimes such charges are big and obvious, like the $3,000 charge at Best Buy for a big screen TV that you didn’t purchase. But sometimes they are much smaller and can go unnoticed for many months, especially when you don’t take the time to read every line of your bill. Then, when you finally do notice, you’re shocked to realize that you’ve paid hundreds of dollars that you never authorized.

You may have some protection or rights of appeal if the charge is within the last 60-90 days, but anything much older than that is going to be your problem. If the charges are the result of identity theft, the longer you let it go on, the harder it becomes to stop it. Read your bills every month, question every charge and if something doesn’t seem right, report it immediately.

Mistakes: Billing mistakes happen, and pretty frequently, too. Sometimes you’re double billed for things (medical bills are legendary for this), utility meters are misread, charges are posted to the wrong account, your charges don’t match your receipts and on and on. If you catch these mistakes early, you can ask to be re-billed for the correct amount and refuse to pay until you get a correct bill. Or you can dispute an incorrect charge and have it corrected. However, if you go ahead and pay the bill or fail to notice the mistake quickly, you can have a much more difficult time getting it corrected because the company may take the fact that you paid as acceptance of the mistake and may make you go through more hoops to fix the problem. Mistakes may also become permanent, such as when you are billed the wrong amount for a service, you fail to challenge it, and then the next month the computer spits out the same wrong bill. This can go on for months and cost you big money if you don’t catch it.

Fat (also known as things you’re paying for but never use): It’s a good idea every month to comb your bills and look for the fat you can cut. How much stuff are you being billed for that you never use? Are you paying for an unlimited texting plan and you send two texts per month? Are you still paying for that website subscription and you haven’t visited the site in six months? Are you paying for features on your phone bill like call waiting that you never use? Find the fat and cut it. There’s no sense in paying for stuff you aren’t using.

Changes in terms: Banks, credit cards, and loans all notify you of changes in their terms and most do it via your billing statement. It may come along as an insert with your bill, or it may be two lines of text wedged at the bottom that says, “Next month you’ll be charged fees for X, Y, and Z.” Fail to read your bill carefully and you’ll miss this helpful bit of information and you’ll lose your ability to opt out, switch billing/account types, or challenge the new terms. Silence is considered acceptance, so if you don’t notice and you don’t question it, you’ll be paying more next month.

Promotional offers: Sometimes your bill comes with ways to actually help you save money. It may be a flyer telling you about the refer a friend program, or that you can receive a credit if you opt for paperless statements. It may be a line of text on the bill itself telling you that you can try something for free, or that taking a simple action (such as opting for time of use rates at the electric company) can cut your bill. Whatever it is, if you don’t read your bills thoroughly, you could miss out on some valuable promotions.

Fees: Everything seems to have a fee these days, even things you thought were free. If you don’t read your bills, you could miss the fact that your previously free checking now charges a fee, or that you are being charged for receiving your checks with your statement. There are plenty of fees you can’t escape, but sometimes you can dodge a fee simply by switching account types or taking some other action. But if you don’t know about the fee, you can’t do anything about it, and after a while those $1, $2, and $3 fees can really add up. Read your bills and question any fees that you are charged.

Due dates: It’s not just credit card companies that like to change due dates. Utility companies, loan companies, and cable companies all may change their due dates without telling you. Well, they do tell you, but it’s on the billing statement. Fail to read it and just pay your bill as you usually do and you could be late, costing you huge late fees. Read the statement and note the due date.

So you know what you owe and to whom: This one sounds like a no brainer, but it’s amazing how many people, when asked, can’t name their bills or how much each one usually is. If you don’t know how much you owe and to whom, how can you make a good budget or have sound financial practices? You can’t. Reading your bills every single month gets you familiar with what you owe, to whom, and how often. It lays the foundation for budgeting and keeping yourself afloat.

It also means you can quickly identify when things are wrong. If the cable bill is always $100 and it suddenly turns up at $500, you’ve got a problem and you know it. Some people just blindly pay because it doesn’t seem odd to them because they have no knowledge of what “normal” is.

Reading your bills every month can save you hundreds of dollars a year, particularly if you’re the victim of fraud or a big mistake. Don’t just blindly assume that the bills you receive are correct. Look for mistakes, and match your charges with your receipts or your meter usage. Take the time to question anything that seems funny and do it immediately. Errors caught early are easier to fix than those that have become permanent.

9 thoughts on “8 Reasons Why You Need to Read Your Bills Every Month

  1. I definitely second the “read your bills” advise. I ordered something and later cancelled it within the allotted 30 days, but there were 3 other “added memberships” they stacked which you had to cancel individually – each for 10-15 apiece .. it took me three months to catch them all, and ofcourse they would NOT refund them, so buyer beware – any “free trial” will end up costing you more than the item would have been at full price if you snooze on the details. Another situation was where some salesclerk fatfingered an amount and a 47.12 purchase turned into 471.12 on my bill … and it took 3 months, digging around for old receipts, and fighting over limit fees (since that purchase put me over my card limit – because they LOWERED it as a result of that charge .. WTF?!? it took months to sort it out and the limit is still lowered and I am now stuck with a nasty APR to boot … be careful … its a lot harder to pay once the mistakes pile up!

  2. Be persistent. I switched OUT of paperless billing for my cell phone account, because the complete bill was so hard to download! I called the company 3 times and had them read me the bill, because their tech support couldn’t figure out why it wouldn’t load. They didn’t even argue when I requested going back to a bill in the mail.

  3. Supposedly sometime in June or July I got notices that my credit card bill minimum payments were going up. I don’t remember seeing them, and as I have been paying more than the minimum, my bills have steadily been going down and I’ve been feeling good about them, so when the second bill came 2 and half times higher than what it had been the prvious month, I called to find out what was going on. Okay fine, they are in charge and it is their bill. If they want to charge more that is their business but tough on us with limited incomes. BUT what made me mad was their saying this was to help me out so I could pay my bill faster! Help me out nothing. I was already paying as much as I could.

    Then opened my garbage bill and found that there is a new $3 charge for having a paper bill which is apparently the latest scam with companies to get more money. And yet again they tried to make it sound like this was all done to help us out so we wouldn’t have so much paper around the house, blah, blah, blah! The only way to avoid the charge is sign up for automatic payments out of our checking account which I try to avoid like the plague. I don’t like businesses coming in and scooping money out of my account until I know for sure it is deposited. They will even charge the fee if we have it paid with a credit card or a one time transfer from the bank. It has to be completely atuomatic. This is the same garbage company that never picked up my garbage a couple of weeks ago.

    This has been a rough couple of weeks for me physically and then to run into this stuff, makes me want to scream, so your topic was right on. Thank you for letting me vent!

  4. I totally agree. I certainly pay attention to my bills each month. In the last three months I caught both Comcast & Sprint overcharging me.

  5. You mentioned cutting the FAT out of the monthly credit card bills each month, and you’re right. Some people are weighted down by recurring small charges for needless stuff they agreed to years ago, that they don’t use. By the time they realize they paid for something extra such as AOL fees of 15.95 a month for the last 36 months, they’ve already lost five hundred bucks.

    Thank You, Jennifer!

    John DeFlumeri Jr.

  6. When my hubby and I got married and I got used to what his credit card bills were, I asked what a particular charge was for. He didn’t know so he got on the phone to find out. Turned out to be a recurring charge of around $40 for a service he thought he had cancelled more than a year prior! Because he hated paying the bills, he let them go as long as possible and didn’t inspect them. Between me paying the bills on time (he had been prone to late charges also) and getting charges like that dropped we ‘saved’ a lot of money putting me in charge. It wasn’t that he was incapable of paying the bills, I just did a better and more thorough job even though I’m sick and occassionally miss things like notices of minimum payments going up (that I can’t do anything about anyhow).

    I’m very systematic in how I pay bills and have a notebook with a page for each month of the year divided into weekly ‘paydays/bill pay days’. I have mortgage payments, automatic withdrawals, once a year payments, etc. noted in the correct month and week of the month. Although it doesn’t mean I don’t make mistakes, it sure helps prevent many and I know every month/year that a bill is going to turn up on a certain month and how much it should be. It holds down surprises such as oops car insurance is due and the frantic gathering of money. I know the bill is coming. Kind of like people panicking because it is December and now time for Christmas. In my lifetime (over half a century) Christmas has always shown up in December so I always wonder why no one is prepared for it (assuming you celebrate it in traditional ways). Granted this doesn’t mean we always have all the money ready to go for a particular bill (somethings are difficult when self employed/disabled) but it helps to know a big bill is coming when you get a sudden windfall.

    I think reading those bills and checking for errors and being systematic in paying them goes a long ways towards getting your financial life together.

  7. Checking our auto-deducted water bills very carefully also pointed out to us that we had a severe water leak somewhere…..we were traveling for a few weeks and our bill actually went up! I called the water department and they came out and located the leak. Could have cost us $1000 or more in bills and thousands more in damage over the year and it was fixed for about $100.

Leave a Reply

Your email address will not be published. Required fields are marked *