Take control of your accounts

Here are five tips to help you make sense of and keep on top of all your accounts

PAYING your accounts on time is a healthy financial habit. Not only will you avoid higher interest rates and additional fees for late payments, but it also reflects well on your credit record. However, for many of us paying accounts feels like a neverending task. It’s a bit like laundry – it just never ends. But you should resist the urge to ignore that email or scrunch up that envelope and toss it away.

Staying on top of your accounts enables you to manage your finances far more efficiently. Here are 5 tips to help you get your ducks in a row.

1 USE A FILING SYSTEM

When you open your accounts – whether they come via email or post – file them. Your accounts need to be kept in a place that’s easily accessible. For example, you could create a folder in your inbox that’s specifically for bills, accounts and receipts.

If you’d like to protect yourself from technological mishap, save your digital documents to Google Drive or iCloud. This will mean that even if your computer gives up the ghost, your documents are safe in cyberspace and you’ll still have access to them – just make sure you remember your password.

2 MAKE ONE LIST

Put together a list of all your accounts and monthly expenses. This will give you the full picture of where your income goes every month. Your bond or rent, cellphone contract, car repayment, personal loans, store credit facilities and the outstanding amount on your credit card are all accounts that must be paid.

For many people, seeing the numbers in black and white is the motivation they need to stop creating unnecessary debt.

This list can double up as a checklist to ensure all your payments are met. If you’re a whizz on Excel, you can create a spreadsheet that shows each month’s figures, debit days, interest rates and the total amount still owed. This way you’ll also see how your loans shrink month by month.

You’ll also know which loans have the highest interest rates and therefore are the most expensive. If you ever have money spare, put it towards paying off debt with the highest interest – it could save you a lot in interest over time. Registered credit providers should not charge levies if you request to pay off your debt faster than the contract period.

To ensure you’re aware of all the accounts you’re paying, take a look at your bank statement to see what gets deducted every month.

The National Credit Regulator’s website (ncr.org.za) has a list of credit bureaus where you can request your credit record. Every loan or financial contract you have is listed on your credit record, from your cellphone contract to your car loan. You are entitled to one free record per year.

3 MAKE IT AUTOMATIC

Consider making all your fixed payments debit orders to ensure that your accounts are settled each month, even when you’re away or don’t have signal or data for online banking.

4 DON’T LET IT BOUNCE

Consider changing all your debit orders to one specific day, like the day after you receive your salary.

This way you can ensure there will be money in your account when the debit orders are paid. It also makes it easier to keep track of your payments, as opposed to when they’re scattered across the month.

If a deduction goes off and you have insufficient funds in your account, the payment will “bounce”. Most banks attach a fee to debit orders that have to be made again.

Find out if there’s a grace period between the time when an account should be paid and when the creditor starts charging extra interest because of a late payment. It can give you time to ensure you have money to pay the account before the extra interest is charged.

5 UNDERSTAND AND USE THE TOOLS YOU HAVE AT YOUR DISPOSAL

Banking apps make it easy to check your bank statement each month and ensure all relevant payments were made, whether by debit order or electronic transfer.

Check debit orders to make sure the correct amount was deducted. If not, you’ll have to query it with your bank or the service provider.

Banks now use the DebiCheck system, whereby you must confirm a new debit order with your bank before they approve the deduction.

You confirm the amount to be debited as well as the date of the deduction. If the recipient of the payment changes the amount or the date, the bank will notify you of unusual activity. You will be asked to approve changes to the amount or deductions date. DebiCheck is used to prevent debit order fraud and make it a secure payment option.