{"id":1445,"date":"2007-11-13T13:26:32","date_gmt":"2007-11-13T21:26:32","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/2007\/11\/13\/why-you-shouldnt-prepay-your-monthly-bills\/"},"modified":"2019-07-23T01:00:59","modified_gmt":"2019-07-23T08:00:59","slug":"why-you-shouldnt-prepay-your-monthly-bills","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/why-you-shouldnt-prepay-your-monthly-bills\/","title":{"rendered":"Why you SHOULDN&#8217;T prepay your monthly bills"},"content":{"rendered":"<p>Earlier today I wrote that <a href=\"https:\/\/www.getrichslowly.org\/money-hack-prepay-your-monthly-bills\/\">I like to prepay my monthly bills<\/a>. I acknowledged that some people might think this was dumb, but that I liked to do it anyhow. It&#8217;s not often that I share something with which GRS readers vehemently disagree. This is one of those rare cases.<\/p>\n<p>Because there&#8217;s so much opposition to this idea, and because each of these points is valid, I&#8217;ve combed <a href=\"https:\/\/www.getrichslowly.org\/money-hack-prepay-your-monthly-bills\/#comments\">the comments<\/a> to compile a list of reasons you should <i>not<\/i> prepay your monthly bills:<\/p>\n<ul>\n<li>When you pay your bills monthly, you&#8217;re more likely to review your statements to be sure there&#8217;s nothing amiss. If you prepay your bills, you may not even bother to open the statements.<\/li>\n<li>Some companies refuse to accept prepayment, and may even charge a processing fee to issue a refund check.<\/li>\n<li>It&#8217;s up to you to keep track of when the prepayment is up. As I mentioned in the comments on the previous post, I have a co-worker who often forgets when the prepayment period is over (because he doesn&#8217;t check his statements), and he ends up with late fees.<\/li>\n<li>By prepaying, a person may be tempted to spend the money on other things. For example, if you prepay your cable bill, you may be tempted to purchase a pay-per-view show that you otherwise would ignore.<\/li>\n<li>What happens if you prepay a bill and suddenly discover you need the money for some other obligation? Or what happens if you are forced to move? Or your house burns down? You&#8217;ve already prepaid, so there&#8217;s no way to get your money back.<\/li>\n<li>By prepaying bills, you create an artificial cost-of-living. Because you&#8217;re not dealing with monthly cable or phone bills, it&#8217;s easy to forget that they need to be accounted for.<\/li>\n<li>Setting up automatic billpay from your checking account would accomplish the same thing, but you&#8217;d get to keep the money in an interest-bearing account before it was needed.<\/li>\n<li>And the most popular reason to avoid prepaying your bills: When you do so, you&#8217;re essentially providing an interest-free loan to the company you&#8217;ve paid.<\/li>\n<\/ul>\n<p><b>These are all excellent points.<\/b> But are these arguments strong enough to make me change my mind? Only one. Before I next prepay my monthly bills, I&#8217;m going to do more research into automatic billpay. The last time I checked, my credit union wanted $5\/month to do this.<\/p>\n<p>While these arguments aren&#8217;t strong enough to dissuade <i>me<\/i> from prepaying my bills, they&#8217;re strong enough for me to regret having posted the money hack this morning.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Earlier today I wrote that <a href=\"https:\/\/www.getrichslowly.org\/money-hack-prepay-your-monthly-bills\/\">I like to prepay my monthly bills<\/a>. I acknowledged that some people might think this was dumb, but that I liked to do it anyhow. It&#8217;s not often that I share something with which GRS readers vehemently disagree. This is one of those rare cases.<\/p>\n<p>Because there&#8217;s so much opposition to this idea, and because each of these points is valid, I&#8217;ve combed <a href=\"https:\/\/www.getrichslowly.org\/money-hack-prepay-your-monthly-bills\/#comments\">the comments<\/a> to compile a list of reasons you should <i>not<\/i> prepay your monthly bills:<\/p>\n<ul>\n<li>When you pay your bills monthly, you&#8217;re more likely to review your statements to be sure there&#8217;s nothing amiss. If you prepay your bills, you may not even bother to open the statements.<\/li>\n<li>Some companies refuse to accept prepayment, and may even charge a processing fee to issue a refund check.<\/li>\n<li>It&#8217;s up to you to keep track of when the prepayment is up. As I mentioned in the comments on the previous post, I have a co-worker who often forgets when the prepayment period is over (because he doesn&#8217;t check his statements), and he ends up with late fees.<\/li>\n<li>By prepaying, a person may be tempted to spend the money on other things. For example, if you prepay your cable bill, you may be tempted to purchase a pay-per-view show that you otherwise would ignore.<\/li>\n<li>What happens if you prepay a bill and suddenly discover you need the money for some other obligation? Or what happens if you are forced to move? Or your house burns down? You&#8217;ve already prepaid, so there&#8217;s no way to get your money back.<\/li>\n<li>By prepaying bills, you create an artificial cost-of-living. Because you&#8217;re not dealing with monthly cable or phone bills, it&#8217;s easy to forget that they need to be accounted for.<\/li>\n<li>Setting up automatic billpay from your checking account would accomplish the same thing, but you&#8217;d get to keep the money in an interest-bearing account before it was needed.<\/li>\n<li>And the most popular reason to avoid prepaying your bills: When you do so, you&#8217;re essentially providing an interest-free loan to the company you&#8217;ve paid.<\/li>\n<\/ul>\n<p><b>These are all excellent points.<\/b> But are these arguments strong enough to make me change my mind? Only one. Before I next prepay my monthly bills, I&#8217;m going to do more research into automatic billpay. The last time I checked, my credit union wanted $5\/month to do this.<\/p>\n","protected":false},"author":3287,"featured_media":237034,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[496,495],"acf":[],"_links":{"self":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/posts\/1445"}],"collection":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/users\/3287"}],"replies":[{"embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/comments?post=1445"}],"version-history":[{"count":0,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/posts\/1445\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/media\/237034"}],"wp:attachment":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/media?parent=1445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/categories?post=1445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}