Managing household finances can be a difficult feat, especially as our economy continues to recover from the Covid-19 pandemic. In fact, American households spend over $ 4.4 trillion on recurring bill payments annually, and staying on top of those bills is imperative to maintaining financial health.
Another thing to watch out for is the costs associated with paying bills. These can include payment account fraud, identity theft, overdraft fees, late fees, and negative credit impacts that can average up to $ 925 per household per year.
There are steps you can take to improve your financial health just in time for the New Year. I contacted Joe Kreyenhagen, VP of Marketing and Consumer Services at doxo, a bill payment service, to discuss the best ways to save on your bills and even increase your credit score in 2022.
In what ways can you save money on your bills?
Utility costs are a priority area where people can look to save money. They can also often save money on their cable and Internet or mobile phone plans. There are two main strategies for doing this: first, individuals can try to negotiate with their current supplier to lower their rate, or two, find another supplier. Often, competing companies offer better rates to new customers because they want to attract new subscribers.
In general, the best way for consumers to know if they are getting the best deal is by how much they should or could be paying for their bills. Consumers can consult our database national and regional averages in the most common household bill payment categories. If consumers have reliable data on how much their neighbors are paying, they will be much better equipped to negotiate, whether it’s using a bill negotiation tool or contacting suppliers directly.
How could consumers improve and maintain their credit rating?
In 2020, the difference in credit costs between prime and subprime credit ratings has increased significantly. This was likely due to the higher unemployment rate and the industry’s overall concern that people with low credit scores might not be able to repay their debt. For example, the credit card billing rate in 2020 reached over 4%, the highest in nearly a decade.
In our recent Hidden costs of bill payment report, our analysis quantified the specific impact on interest rates of a 35 point improvement in credit rating. We found that this 35-point improvement could save households an average of $ 684 per year when considering the three most common forms of consumer debt (mortgage, car loan, and credit cards). The average American household has about $ 92,000 in debt, so these low interest rates have a big snowball effect.
Consumers should always strive to improve and / or maintain their credit rating, and the new year offers us the opportunity to strengthen that goal as a financial goal.
What are the best strategies for organizing and managing your invoices?
For many, paying household bills is a messy and fragmented experience. The average household pays 10 different bills per month, often across multiple websites and with different payment methods. Consumers should consider ways to improve their bill payment process. Consider a customer-centric bill payment experience that is independent of any bank or biller. This allows consumers to enjoy the freedom to pay their bills with multiple payment accounts; manage all due dates in a single view; schedule automatic payments; check the status of the payment with real-time monitoring; on a cell phone or other convenient device.
Making timely bill payments is a critical way to avoid the hidden cost of late fees. Careful management of finances to ensure there are enough funds in one’s bank account before paying by debit card can also help consumers avoid overdraft fees.
One last tip for the New Year?
Whether you’re trying to pay off credit card debt, saving to buy a house, or just trying to save some money in the New Year, keep these three things in mind: Make sure the Money you make is more than what you spent, create a budget and stick to it, and lastly, be diligent about how you pay your bills to avoid unnecessary fees and stress.
Jeanette Pavini is an Emmy Award-winning journalist specializing in current affairs and consumer protection. She is the author of “The Joy of $ aving: Money Lessons I Learned From My Italian-American Father & 20 Years as a Consumer Reporter”. Jeanette contributes regularly to TheStreet. His work includes reporting for CBS, MarketWatch, WSJ Sunday, and USA Today. Jeanette has contributed to “The Today Show” and a variety of other media. You can follow his money saving tips and ways to give back. on Facebook: Jeanette Pavini: The joy of having a community. Find links to his social networks and his book on Jeanette Pavini.com.