This small tip to save money might seem obvious. Yet, even some of the most organized and savvy moms can still get this one wrong while juggling a lot of things on a daily basis.
Quite a few times, when I was certain of my diligent checking and balancing of my finances, I got an unpleasant surprise. All because I put too much trust in banking and billing automation so widely used these days. I assumed that all my bills were precise and accurate, and boy, was I wrong!
Out of all saving tips I share on this blog, this one can make a dramatic difference in your financial health.
Here it goes: you need to get a permanent habit of checking every receipt, charge, and expense that you incur.
Not long ago, I discovered that my monthly Internet bill nearly doubled, and a credit card that I didn’t even use had a $100 balance on it. Lucky for me, I discovered these charges by accident while logging into my online banking accounts and looking for something completely different! See more details about how these accidental charges happen below.
What I learned was that no matter how routine and predictable your monthly expenses might be, you must review all your bills regularly and on an ongoing basis. This includes utilities, subscriptions, credit card fees, purchases, restaurant and grocery bills, as well as any refunds you processed in a given period.
With the convenience of online banking, credit cards, mobile payments, and pre-authorized payments, we all can get into a “lazy accountant” mode, relying too heavily on the automation to do the checking for us. While this strategy works most of the time, it is still prone to errors and it is in your own interest to ensure that your financial situation doesn’t suffer because of this.
The habit of diligently reviewing your bills on an ongoing basis will save you a LOT of money. You will be amazed at how many times you will find some sort of overcharge on your bills simply because of someone’s error, or your assumption that everything was well balanced.
Here are just two (of many) examples how I saved $500 this year simply by reviewing my monthly statements.
Example 1 – Monthly Internet fee went up by 40%?!
I’m not sure how much people pay for the Internet service around the world, but in Canada, this cost is very steep! It seems that while technology continues to develop very rapidly, the costs for the Internet and mobile services continue to grow.
For convenience, my Internet bill is set up for pre-authorized online payments. Recently, while reviewing my monthly statement via online banking I noticed that my Internet charge rose by a whopping 40% literally overnight! When I saw it, I gulped and stared at for a few moments, trying to remember if I skipped the payment in the previous month. I then logged into my Bell online account and saw that my monthly charge went up from $50 to $90 per month. Of course, I immediately called Bell. Their representative explained that I had a promotional price applied to my bill in previous months and that the promotion was now over. This meant that the Internet service would cost me $90 going forward. Needless to say, paying that much was considerably above my budgeted monthly expense. At the same time, I realized that I had to pay this charge because I simply forgot to keep track of the date when the promotional price was ending.
When I signed up with Bell, my original plan was to research other providers and their prices before the full price from Bell would kick in. Of course, I forgot to do that. Thankfully, after I explained the situation to Bell’s representative, she was able to prolong my Internet service for a couple of weeks at the previous reduced rate to give me time to decide what I wanted to do after.
The moral of this story is that Bell didn’t make any errors by charging me a higher fee that month. I was not diligent with keeping track of the promo dates. And it was only because I reviewed my bank statement early enough that I was able to both reduce the charge and promptly look for a more cost-effective option for the Internet service.
So what would have happened if I did not review my monthly banking statement on time? I would have incurred an extra $120 in charges in just three months, $240 in six, and $480 (!) over twelve months.
Tip: If you have any services that you’ve signed up for with promo rates, make sure to make an early calendar reminder about the date when the full rate will be kicking in. This way, you can make a smart financial decision in advance where necessary. You might also want to read a helpful article from The Balance on how to effectively review and manage many bills.
Example 2 –$100 annual fee for an unused credit card?
This one was quite a surprise!
One of my savings accounts which I opened a while back and rarely used (no fee account) had a credit card attached to it, which I also didn’t use for a long time. When I opened this rewards credit card, it came with a $100 annual fee that was waived in the first year as a bonus. At the time, this was the only rewards card I had and I used it for about six months or so. After I found a credit card that suited my needs better, I asked to downgrade this previous rewards card to the lower tier which had no annual fee. The downgrading was done by me at the branch, and I haven’t used this card ever since.
Then after nearly a year, I decided to check on my forgotten savings account which had the downgraded credit card attached to it. When I logged in, the online banking page displayed both savings and credit card accounts in the same window. This is how I saw that the credit card had a $100 balance on it, and it was a recent charge for the annual fee. Surprised, I dialed their customer service to inquire, and the rep confirmed that I did, in fact, downgrade this credit card last year. She then said that somehow their system was not able to reconcile this change in this year and that I had to confirm the downgrading once again by physically going into the branch. I was not happy about that, but the representative was able to instantly reverse the $100 charge on my credit card that same day.
Unlike in the prior example with the Internet bill, the credit card charge was an error of online banking automation. Because I decided to check on this specific banking account, I saved $100 in annual fees for the card I no longer used. Importantly, I also avoided a potential damage to my credit score, which would have suffered if this balance remained unpaid for a period of time.
So, if you are looking for a small tip to save a lot of money, it is simple: make it a habit to regularly review all your bills, bank statements, and various charges both online and when buying in person.