Paying your bills is a stressful but unavoidable part of being an adult. There are so many that it can get a bit overwhelming — water, credit cards, cellphone, and insurance for your home and vehicle.
Many people even subscribe to a magazine or online site that is set to auto-renewal, leaving you without anything in your checking account when you forget about paying the monthly rate. Netflix, HBO Max, and Hulu can charge a pretty penny when you are enjoying all of that great television.
With all these monthly expenses to keep track of, it is understandable that even the most responsible person will occasionally forget to pay one of them. When this happens, just how forgiving are each of the businesses you owe money to? Will they come after you like a mobster? Not hardly. But there are repercussions to ignoring your bills (like no lights).
“I missed my car insurance payment.” “I didn’t know I had another section on my tax forms to fill out in April.” We’ll cover as many scenarios as possible in a variety of fields to help you understand how to stay organized and keep up with your routine expenses. We’ll also discuss how you can get back in the good graces of the company you owe money to.
Missing a Car Insurance Payment
We’ll start with car insurance payments, which have some of the most jarring consequences for forgetting or ignoring them. Your car insurance is not something to miss so you can watch fall movies to watch at home. Skipping out on car insurance payments could end with you driving and getting a ticket for not having a valid license.
The DMV is immediately notified when you haven’t paid your car insurance bills. They in turn may decide to suspend your license because in most states, it is illegal to drive without an insurance policy. The fines and other potential charges you face for this choice are not something you want to hassle with.
If you simply can’t pay your insurance on time because you don’t have the money, talk to your agent about your unique financial struggles and ask for some extra time. There is typically a five-day grace period to paying insurance, but a good relationship and some trust between customer and company can lead to extra time to pay bills.
You could also look into reconfiguring the schedule of your payments around when you know you will be getting paid. This could mean paying in the middle of the month instead of the end, or you could ask for the payments to be made in smaller bunches; instead of $120 on the 31st, you could split it into $40 every 10 days.
There is no one-size-fits-all mantra for handling late payments to your car insurance provider. You have to evaluate your situation and go from there. You can see there are options for just about any experience, no matter how daunting it may appear.
Why is the IRS at my door?
There are a lot of horror stories and rumors that people perpetuate unfairly around the IRS and paying taxes. They will get the money they are owed eventually. You can’t skip out on your taxes, but they aren’t going to come to your door and arrest you a week after tax day because you missed giving them a form.
You will usually be fined progressively the longer you wait to turn in your taxes. You will be fined no more than 25% of your total tax number for waiting to turn in your documents. It starts at less than a 1% interest penalty on your total sum owed.
If you are sick or having a family emergency, letting the IRS know will usually give you some extra time, but you also will need some sort of proof that you’re telling the truth. Emergency room forms, doctor signatures, and other similar evidence will help get the excuse validated.
Try not to be scared of the IRS and just pay your taxes on time. Prepare for tax season by getting professional advice from a tax service or a parent or friend who has more experience than you do in paying taxes. If you are a freelancer and need to calculate more tax numbers yourself, it is even more important to go this route for help.
Late Credit Card Payments and Credit Scores
It is important to understand the responsibility of getting a credit card. A line of credit is a loan from a bank that you have to pay back later. When you use a credit card, the bank is paying for whatever product or service you have just purchased. It is their money and they want it back. Otherwise, they won’t trust you with their money in the future.
This will lead to a lower credit score, less available credit on your cards, and the inability to take out loans on big things in your life like houses and vehicles. It is very hard to be a financially stable adult if you owe money, but there are ways to get debt relief.
With these types of programs, you can find creative solutions for your continuous late payments on credit cards. For example, many people take out too many cards and have multiple maxed-out lines of credit.
This is overwhelming, but you can make it easier to handle if you combine all the cards into one tidy bill that can be paid on a scheduled date instead of keeping track of individual debts.
You can also go to credit counseling, where professional experts will give you advice on how to climb out of your hole and build better habits for credit cards and loans in the future. There are always solutions to late credit card payment problems, but you have to act first and understand your credit score.
Fix the Problem Before It Starts
Everybody knows whether they are taking on too many bills if they calculate all their monthly expenses on a budget and compare it to the monthly income they take in. The best thing you can do to avoid the stresses of late penalties is to avoid them.
Look at every possible problem and create solutions before they need to be used. This is the best way to handle any money problem, right?