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.