More Americans are Forgetting to Pay Their Bills
Delinquencies Up
Over the last few months, market observers have noted an uptick in late or missed payments and credit card delinquencies. Pacific Gas & Electric (PCG) reported 1.4 million customers were late paying their bills last year — a greater than 50% increase from 2020. Both JPMorgan Chase (JPM) and Wells Fargo (WFC) noted an increase in credit card and auto-loan delinquencies.
While industry analysts acknowledge the payments shortfall in part reflects an affordability issue, others wonder if the many negative issues weighing on people’s minds are leaving them distracted. With the ongoing threat of COVID-19, stock market declines, and soaring inflation, Americans have a lot to worry about.
Bad Consequences
Financial advisors are warning clients of the perils of neglecting financial responsibilities. Missing credit card payments can adversely affect credit scores and result in both late charges and higher interest rates on debt. Failing to keep an eye on one’s investment portfolio can also trigger a financial cost in the form of higher taxes due, suboptimal portfolio performance, or both.
Troubling headlines can prompt anxiety and a crisis mentality that makes it easy to forget everyday tasks like paying the utility company. However, there are ways to keep the bills paid and achieve peace of mind amid the noise of external events.
Tips and Tricks
Behavioral psychologists and advisors have a few tips and tricks that can make it easier for you to stay on top of your financial affairs. The method that works best depends on the individual. For some, writing down what is due on what date may work. For others, automating payments can remove the need to remember all those due dates. Another idea is to set up a regular schedule for bill payments, perhaps bi-weekly, with each month’s bills paid over two sessions.
Putting a recurring appointment in your calendar for an investment portfolio check in can help to ensure your investments aren’t neglected. Offloading the task to a money manager can also ensure you stay on track, provided that fits your finances.
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