Ignorance may be a virtue in specific conditions but definitely not when it comes to financial matters.While it’s crucial to have your money matters sorted, many individuals, especially those in their 20s and early 30s, struggle tomake payments on time. However, laziness and procrastination radiating from ignorance can really hurt the pockets.
Here are thecommonfinancial paymentswhere ignorance can translate into a sizeable loss over time:
- Payment of Utility Bills
Failure to paying utility bills on time –electricity, telephone, internetand the like, is one of the most common outcomes of forgetfulness. This not only summons needless exploit in the form of penalty charges for late payment, consequences like shut-off may also include a re-establishment deposit to establish a guarantee of future payments. Thislousy habit has the potential to wipe out a substantialamount of your money, more than you can imagine.
- Credit Card Dues
Non-payment of credit card dues is by far the greatest blunder stemming from ignorance. Default on this front means shelling out late payment charges in addition to a few percentinterest on the outstanding amount. More regrettable, the late payment could forbid a credit card holder the benefit of invaluable interest-free cycle whilst harming his or her credit profile.
- Petty Expenses
Outstanding payments of housemaids, grocers, milkmen, newspaper guyscan discolourone’s image in society and bring disregard from day-to-day interactions or conflicts with them. Also, over time, these pending liabilities can heap up into an immense sum which in turn coulddisturb one’s financial stability.
- Loan EMIs
Timely payment of equated monthly instalments is a crucial factor in ensuring a person’s smooth financial path in the future. As failure to pay EMIs on time– be it an auto loan, personal loan or housing loan–more than attracting late payment penalties, can severely disrupt his or her credit score. This, in turn, diminishes the person’s eligibility of securing future loans.
- Filing Income Tax
It’s every taxpayer’s responsibility to file tax returns and pay taxes on time. However, it is interesting to note that someindividuals often ignore this vital parameter and procrastinate the same to a further date. Not filing returns or delaying them beyond the due dateleads to repercussions like:
- Notice from the tax department
- Late filing penalty or fees
- Term Insurance Premium
Failure to pay insurance premium – be it health insurance or term insurance, within the grace period means payingsubstantially higher to restore the policy. This is because most insurers charge revival charges along with the premium amount, which can either be a fixed fee or a certain percentage per month interest on the outstanding amount. This is definitelyanunnecessary deplete. Hence, procrastinating term insurance payment, either due to ignorance or forgetfulness is a must-avoid, especiallywhenthe financial future of your loved ones is dependent on it.
You can get help in this front by opting for automating payments that come with the best term plansoffered by reputed insurers. In this case, you also get timely reminders for premium payment due date. However, before making the purchasing decision, scorch through the internet and focus more on term insurance comparison in order tobuy the best product to secure the future of your family.
If you are struggling to make any of the payments mentioned above on time, consider having text/email reminders sent to you before your due date or setting up automatic payments. Signing up for automatic payments is a fail-proof way of paying on time as it allows you to choose a date each month to have funds automatically withdrawn from your bank account.
On the other hand, if lack of financial resources is what’s holding you back, consider how you can earn more and spend less, something that worksbest with your budget and pay schedule.