I sat with a friend and her box of bills for the most of the day yesterday.
It took hours to go through. Bills were late, her phone was turned off. Her water is scheduled to be turned off. She has been flying by the seat of her pants for years. She has no clue where her money is going and why she has nothing.
Finally we figured out who she owed and how much and then we took out the bank statements to mill over.
Problem solved. She has everything automatically drafted from her account and had signed up for the automatic overdraft protection.
Well when you have a tight budget, living paycheck to paycheck and do not have a cushion in your account....just the smallest mistake can cause you to overdraft. The huge $30 convince fee to cover everytime you overdraft can add up to $100's of dollars.
Lesson learned for her the hard way. Remember that lovely convinence fee? It ate up her whole pay check. Not so convient!
Tip: If your budget is very tight...it is best that you pay your bills when you are ready and not use automatic withdrawl. It would of been better for her to pay the late fee with the individual companies, chose to pay the utilities and mortgage and wait to pay credit cards. Because now she is in the situation that utilities are being shut off.
Lesson Learned the Hard Way