5 Bills Frugal People Never Skip Paying
Written by
Cara Danielle Brown
Edited by
Rebekah Evans
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“Bills, Bills, Bills,” isn’t just a Destiny’s Child song from the 90’s — it’s also the economic reality for modern-day Americans. Unfortunately, skipping out on bills doesn’t come with a cute dance break and a spot on TRL’s Top 10; skipping certain bills can negatively impact credit scores and result shelling out money towards unwanted late fees. Which is why the frugal amongst us never skip the following five bills.
Also these are the bills you should always pay before the first of the month.
Health Insurance
“I know, paying for health insurance feels like throwing money into a black hole, but trust me, one emergency room visit could wipe out years of savings,” said Taylor Kovar, founder and CEO of 11 Financial.
Being frugal means being careful and economical with money, making that $200 monthly premium a smart hedge if it means avoiding a $30,000 ER bill and years of medical debt over what may have just been some bad sushi. The frugal always protect themselves with a safety net.
Utilities
Frugal individuals don’t mess around with skipping utility bills. “No one wants service interruptions or high reconnection fees,” explained Sofia Wang, senior marketing specialist in the luxury appliances division at EMPAVA. “Timely payment of electricity, water or even the internet is a small price to pay to avoid bigger issues down the road.”
Kovar added that, instead of skipping utility bills, frugal individuals just find ways to use less — like turning the lights off after leaving a room or not running the AC at full blast.
Rent or Mortgage
According to California Civil Code Section 1671, a landlord may charge a late fee if rent is delinquent. This fee is typically 5% to 10% of the total monthly rent. And when frugal individuals consider that’s 5% to 10% more than they would have to pay if rent was just paid on time, they’re absolutely putting a calendar reminder in their phone.
According to Chase, an overdue mortgage payment will also result in late fees and reporting to major credit bureaus which could negatively impact credit scores. Not only would individuals be saddled with fees, they’d also be stuck with higher borrowing rates for the foreseeable future. Translation? Completely avoidable expenditures.
Car Insurance
“Car insurance may feel like an unnecessary expense, but when that fender-bender happens (and, trust me, it will), you’ll be thanking your frugal self for keeping it,” Kovar said.
Similar to health insurance, car insurance means paying for the peace of mind that you won’t be personally liable for paying for all injuries, damages and medical expenses resulting from the crash. Gold Law estimates the average cost of a car accident to be anywhere from $5,700 (if only property damage results and no one is injured) to $1,778,000 (if death occurs). Accidents happen; bankruptcy doesn’t have to.
Credit Card Payments
According to Wang, when it comes to credit card payments, “any missed or late payment can accrue huge interest rates and late fees, both of which can escalate into hundreds more dollars in the course of a year.”
Per Federal Reserve Data, the average credit card interest rate is 22.8% — that’s a huge number — and to make matters worse, credit card interest compounds over time. This is why frugal individuals are very familiar with one, crucial word when it comes to paying off credit card balances: autopay.
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