How to Avoid Late Fees and Manage your Expenses like A Boss

I have had my fair share of paying late fees over the years. My creditors have made thousands of unnecessary money from me because I never paid my bills on time. This could have been money invested in stocks or mutual funds.

When I joined MyEcon, one of the assignments they gave us was to find out where our money was going. Part of that was looking over previous bank statements and logging all spending. I found out that I was paying over $150 a month in overdraft and late fees. Talk about a gut-wrenching feeling. We’re so used to following the same routines every month that we fail to analyze our actions to see where we are failing with our finances. We get stuck on autopilot.

The second assignment was to create a budget with a list of expenses and income. The ugly truth was that I never used a budget and thought it was useless because I never had enough money to pay all my monthly bills….well, so I thought!

One thing I can guarantee about budgeting is it reveals all your emotional triggers. I found out that I shop more when I’m depressed or having a bad day. I buy things I never use, and I love buying in bulk. I would skip a bill to go shopping on a good sales day…doorbusters, one-day sales, and Black Friday sales. I know I’m not the only one that binge shop. 

I had to really discipline myself. And through the self-discipline, I found out that setting my bills up automatically insured that they got paid on time. That way I wouldn’t be tempted to spend the money, avoiding late fees being added to my accounts.
After paying my bills automatically for the first three months, I started seeing a positive balance in my checking account. This was a major accomplishment because my account stayed negative. I had so many overdrafts that the bank smiled Every time my paycheck was deposited. It’s crazy that they never closed my bank account….now I know why!!!

I wanted to share exactly what I did to avoid late fees and how I made a conscious decision to manage my expenses. If you follow the steps below, you too will break free of paying excessive late fees and avoid late payments. What made me stay focus was when my bank account started staying positive and my credit score went up.

1) Find out where your money is going. Write down all your expenses. Be honest and list everything you purchased in the last two months. Separate your bills from your debt. Your bills are paid monthly and it never goes away no matter where you move (Rent, Lights, Water, Gas, Trash, Cable, Rent Insurance, etc.) You can look at your previous bank and credit card statements for help.

2) Create a budget. If you have never done one before, this may be a bit complicated. I have attached a video that may help. Look at other YouTube videos and pick something that’s not too complicated and something that works with how you get paid. Email me if you need help with creating your budget.

3) Save enough money so you can pay all your bills up one month. This will help with the next step.

4) Set up your monthly expenses to be paid automatically. This is going to save you a lot of money and curse words!!!

5) Open an emergency account (rainy day fund). This will protect you when life happens…and it will happen. I don’t care if it’s just $25 a month. Put it up and don’t touch it. Your future disasters are going to thank you for it.

6) Use the extra money you create from setting up your budget towards your emergency account. DONT SPEND THAT EXTRA MONEY!!!!

7) Open a self lender account and pay what you can afford. The purpose of this is to start working on your credit score while you’re working on your finances. This is a BOSS move right here!!!

8) Start fixing your credit. If you have delinquent items on your credit report, now is the time to work on it.

9) Learn how to invest in things that will grow your money. Write an eBook, buy a franchise, purchase some property to rent out, create something that will produce passive income. This means to create a strategy to make money without you having to work for it.

10) Keep track of your progress. Create a vision board to list your goals. Purchase a life journal to help you keep track of your finances, dreams, and thoughts:

Stay focused and don’t give up. Surround yourself with people that are where you want to be. The only way life will get better is when you decide to make it better!!!

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