Friday, April 19, 2024

Scott,

I find your web site fascinating. I can see that you have helped a lot of people and thought that you might be able to help me.

I get paid twice a month. My first paycheck pays the mortgage and the 2nd pays the rest of my bills. The problem is that I get paid on the 1st and 15th. A lot of my debt is due between the 1st and the 15th. I have no choice but to pay late. Will my creditors change my due date if I ask them to, if not, what else would you suggest?

My FICO score has suffered miserably as you can imagine--leaving me with an HFC loan with a 26% interest rate that I can't get out from under.

Please help.

Regards, 
Kay

Kay,

I'm glad that you enjoy DebtSmart.com! My goal is to help people save as much money as possible on their debts!

Timing of bill payment is a problem for many people. And it's not simply the bill timing, but also what happens with the extra cash in between getting paid.

Based on what you said, it seems that your mortgage is 50 percent of all your expenses! That's quite a large percentage. The recommended ratio is 25 percent, but that really doesn't matter at this point. When I purchased my first home, I was in the same boat as far as the mortgage costing half of my income.

Here are a few suggestions to help get the bills under control:

Budgeting: Track your spending to see if you're spending more than you make. Plan to save money from that second paycheck to pay bills that occur after the first paycheck is used for your mortgage. You want to be careful not to spend the extra cash that remains from paying bills with the second paycheck.

Change bill due dates: Contact all your creditors and ask them to change the statement date so your bill is due after you get your second check. Credit card banks should have no problem making this adjustment. They want to get paid so they are quite flexible--certainly in this area.

Do not ever pay late! Paying late is the most costly mistake in financial management. It is better to cash advance money from a credit card, deposit that money in your checking account, and pay on time rather than being late. If you're late, credit card banks will raise your interest rates and charge you fees. Plus, you will lose your advantage in any negotiations for better terms. The key to using this strategy is prudent budgeting and discipline.

Will you be able to pay off the cash-advance loan that helps you pay on time? Is all of your spending less than, or equal to, all of your income? If you spend more than you make, then it's certain that at sometime in the future you'll run out of available credit and money, which can end in bankruptcy-- so do the math and be DebtSmart!

Best
Scott

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