Paying bills: 5 mistakes that can end up costing you more

Paying bills is a big part of life and gets tougher when the cost of living rises. These key mistakes can make the money pain worse.

As living costs continue climbing, the last thing any consumer wants is to pay more money unnecessarily.

A growing cash guzzler is that scourge of household budgets – bills – and finance specialists say too often costly mistakes are made.

Whether it’s utilities, insurance, council rates, car registration or loan repayments, understanding these key mistakes can help save you money.

1. WRONG NUMBERS

Handing over incorrect amounts happens when people fail to pay attention to their bills, says Smart Women Society founder Tea Angelos.

“Whenever you receive a bill, it’s important to take some time to review it carefully to ensure that it is accurate,” she says.

“Even if you have set up automatic payments, you should still check your bills closely.”

Handing over incorrect amounts happens when people fail to pay attention to their bills. Picture: iStock.

2. LATE ISN’T GREAT

Late payments are an expensive habit, with many bill providers punishing tardy consumers, or at least denying them pay-on-time discounts.

“Paying bills late can result in fees, penalties, and even damage to a person’s credit score,” Angelos says.

3. TOO QUIET

Negotiating with bill providers can deliver significant savings, but too many customers say nothing.

“Some service providers may be willing to negotiate bills or offer discounts or payment plans,” Angelos says.

“Many companies offer promotional rates or loyalty discounts to long-term customers. However, you won’t know about these options if you don’t ask.”

Many bills slip below people’s radars and a lot of things are paid without checking.

4. NO ANNUAL CHECK-UPS

Sort My Money founder David Rankin says many bills slip below people’s radars “and a lot of things are paid without checking”.

“For example, if you pay an insurance policy monthly, you don’t know the annual renewal date when it’s going to increase every year,” he says.

“Be prepared for that annual increase and put it under the microscope. It’s a chance to compare what’s out there.”

5. PAYING TOO MUCH

Paying too much at once, such as car registration or council rates annually, can also be a mistake if household cash flow is under pressure, Rankin says.

“It’s more important than ever to pay affordable amounts,” he says. But be aware that some businesses add surcharges for paying monthly, often 10 per cent.

Kogan Essentials director of partner care Ron Gelberg says people can avoid bill blunders by comparing providers before price rises, considering pre-pay options and automating payments.

“A lot of providers offer automated payments to make sure that bills are paid on time and avoid late fees,” Gelberg says.

Rankin says consumers should diarise looming payments such as electricity bills.

“Awareness is key to getting in control and not having your providers controlling you.”

Originally published as Paying bills: 5 mistakes that can end up costing you more