How many monthly bills do you get? You may have a mortgage bill, a car payment, heating, electricity, gas, internet, telephone, television, and that doesn’t even begin with your credit card and store card payments. The fact of the matter is that people today have more monthly commitments than ever before. And with all these various bills it is very easy to forget to pay one on time.
Then there is the
wholly separate issue of whether or not you can afford all your bills.
Sometimes we may simply have over extended ourselves financially and in such situations,
we may not be able to pay all of our bills as they fall due. And what if you
were to lose your job, or become ill or otherwise unable to work? Even if this
is only for a short time, you will have some very real problems meeting all
your monthly bills.
Penalties
This can be
disastrous. First of all, most creditors will slap late payment penalties and
other administrative charges to your account if you are late. Some may recall
or try to repossess assets if they have security over them. This is most serious
in the case of your house but can also apply to your car or any other purchase
you have made by instalments such as a computer or television.
How can you provide
for such an outcome? Well having some savings is a very good start. This should
be able to cushion you for a few months should you lose your job. Then there is
the fact that it is perhaps not so wise to rack up so many commitments that you
can’t reduce your outgoings at short notice.
Insurance Protection
Another option to
consider is payment protection insurance. This can be very helpful and is
designed specifically for situations such as these. How it works is you pay an
amount extra on top of your monthly bill. This is automatically added to your
bill and depends on how much you have outstanding for each bill. For example,
payment protection insurance on a credit card might be priced at £1 per £100
you have outstanding. What happens then is should you lose your job through no
fault of your own, or should you become unable to work due to accident or
illness, then the insurance should step in and make your repayments for you so
that you don’t fall behind and rack up extra fees. This can be a great
assistance to you financially, at a time when you need it most.
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