Confessions of a Laid-off Lawyer

Just Your Average Joe Blogging Away His Debt—In One Year or Less

And Again . . .

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Total Black: $566.79
Total Red: $269,947.64

Well, looks like I did it again—once more.  That same student loan I forgot so many times before, including back in Head Meet Wall, came back today.  Of course.  Because I’ve stubbornly refused to take it off automatic withdrawal.  So my eighty-eight dollar payment will now cost me thirty-five dollars more because of an insufficient funds fee.  Why is this simple lesson so hard for me to learn? 

When automatic bill pay came on the scene I jumped for joy.  No one enjoys paying bills.  I recall late nights when my mother sat at the kitchen table writing checks and balancing her checkbook while the rest of us watched television.  We’d pass her on the way to and from the refrigerator or the cabinet.  So when automatic bill pay arrived, many of us, myself included, were first in line tos sign everything up for it.  It seemed like a god-send.  Bills paid automatically?  How wonderful.  And effortless.  Money just floating away to pay bills.  Put them on financial auto-pilot and kick back and enjoy the rest of your life.

Not so simple though warns Bankrate.com in “The Perils of Automatic Billpay” an article on MSN Money.  Aside: how does a website write an article, I must ask?  At any rate, it cautioned that “if you forget that an automatic bill is being deducted from your bank balance, you run the risk of overdrawing your account, being hit with overdraft fees and damaging your credit.”  Yup.  That’s what’s happened to me.  Repeatedly.  Thankfully, however, it never affected my credit.  Not sure how that could happen when one links automatic bill pay to her or his checking account.  I suppose a bank could report insufficient funds fees to the credit bureaus.  But that seems unlikely.  Surprisingly, however, the article did encourage instead that consumers link their credit cards with automatic bill pay as a vehicle to turn debt into wealth, albeit in limited areas like airline miles, shopping points, and so on.  Interesting idea for sure.  If I were to link my Upromise Master Card, for example, to many bills, I could be paying down my SallieMae student loans.  Must bookmark that idea for later.  But one very important point I didn’t see anywhere mentioned in that article: you need to be sure you can pay those charges down in full each month otherwise you could be paying interest on that debt and double-interest if that debt, like a student loan, already accrues its own interest.  The credit card company gets to tack on finances charges each month.  Like all mirages it’s never as good as it appears.

Whence this desire to one-up the system?  To get something out of it?  Paying bills is a reality of life.  Nearly impossible to escape.  Even the most ascetic person must still pay for basic necessities.  So if we must pay bills, why this abhorrence of them?  Seems a wretched way to live.  When I think back on those memories of my mother writing checks, dim lighting, late nights, and a furrowed brow come to mind.  She’s cast in sepia with blurred edges—like the photo shop features on an Apple computer.  She paid them begrudgingly.  And no, she never explained to me or my sister what she was doing.  I mean, she didn’t take that opportunity to explain to us how one balances a checkbook or what that means.  Working class families often don’t see life’s mundanity as educational opportunities.  Somehow, though, I came out different.  I actually like paying bills.  It gives me a little internal smile.  My spirit lifts a bit knowing my burden is that much lighter.  And for those of us who couldn’t pay our bills on time—or at all over the past few months to few years—paying a bill is something we welcome.  Automatic bill pay takes that moment away; it’s only later that we notice that a bill was paid.  Or in my case, paid with fees.

Not only does automatic bill pay take away that “phew” moment when you pay a bill, it also eliminates the opportunity to pay more.  This student loan payment, with American Education Services, is set around $88.00 a month.  I can’t have the automated debit transaction withdraw more each month—round up to $100.00, for example—because that’s not how it works.  I’d have to send a check or pay on the lender’s website.  So yes, tomorrow I will call and have this account taken off automatic bill pay.  I want to be able to pay more, if possible.  I can send, for example, $90.00 instead of $88.00.

Getting finances under control is fairly simple.  Even I understand that.  Pay bills in full if possible and if not then pay them on time when due, perhaps even few days in advance.  Further in advance if you can, and particularly if the debt accrues interest.  Pay more than the minimum if possible and at least the minimum unless absolutely necessary.  Spend less than you make and save some along the way.  Implementing those maxims, however, is the tricky part, especially when, like me, you tried trying to simplify your life and avoid fees.

As I approach the one-year mark since I set off down this path to getting hold of my finances and bringing my debt and spending under control, I must wonder why I am still engaging in some of the same shenanigans as last year.  What or who can I blame today?  ADHD?  My still-disjointed cash flow?  Island life?  Actually, in all honesty, I did forget this time.  I certainly was aware that August was approaching since I’m now eight days from my goal date.  But what didn’t come to mind was that the first of the month means this student loan payment comes due.  I suppose that sort of scatterbrainedness or absentmindedness I can blame on ADHD.  Fine.  But now what?  Blame doesn’t solve.  Blame doesn’t fix.  Blame doesn’t excuse either.  And it’s happened too many times now.  What’s the block I have on this point?

Tomorrow, for certain, I will call the student loan company and take this debt off automatic bill pay.  Until then I must wonder why I’ve refused, until now, to do this—despite promising to do it in Head Meet Wall.  Automatic bill pay is, in many ways, a luxury of the well-off.  One needs to have sufficient capital in place to take full advantage.  As I noted above, you just dig yourself in deeper if you pay your bills with a credit card—whether automatically or not—and can’t pay that bill off each month.  Perhaps I’ve been unwilling to acknowledged that I’m no longer in that category of people who can kick-back and turn their debts on auto pilot.  At least not yet anyway.

Total black is down because of rent as yet unpaid because Lord & Lady haven’t been around.  It’s also down because of the eighty-eight dollar student loan payment.  I assume the $35.00 fee will hit my account tomorrow.  The auto loan payment was also due today.  But apropos of this conversation, it too slipped my mind.  But I’m granted a ten-day grace period.  I just don’t remember these things when I’m in a position—like my apartment in the morning when I could pocket the money and the bill—to act on them.  I think the app I referenced back in What a Mint! will help.  I hope.

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