Introduction to Pay Ahead

The Way Bills Were Meant to Be Paid – Part 1

As you know Pamela and I are constantly improving our processes.  We call it the business of running our home or my life. We found that our money and resources was, as with most, the hardest to get under control.  It’s even harder to improve. We began to study and define what we meant by our money, our resources and our finances. The first problem area was with paying our bills.  The bills are never ending and yet we would find ourselves frustrated with them, and many times overwhelmed by them. This is an indicator that improvement is necessary. We had to make an agreement to think of this area with out-of-the-box-type thinking.  Most people stop trying to find a solution to the problem, thinking there is nothing they can do about it, but we challenge this thought. Here are two categories we found that define how bills are paid.

Category 1: Before service is rendered.  

Did you know that for some of your bills (financial obligations) you’re making a payment before the service is rendered?  One example is your cable bill. What this means is you make a payment before you ever use the service. The service provided gets paid upfront.

Category 2: After service is rendered.  

Most billing occurs after services are rendered.  This statement should grab your attention. For example, your power bill, water bill, gas bill, mobile phone and more, all send you a statement after the service has been rendered.

With these categories, Pamela and I learned a valuable lesson.  Category 2 (after service is rendered) is like taking out a loan for the service provider each month.  It was a problem since one of our main financial goals was/is to rid ourselves of debt. This monthly process showed us how each month we were indebted to our most “common” service providers.  Here’s what that did for us:

• It keep us chasing bills each month.
• It bound us to making sure payments were made in their timing not our own.
• It gave them the upper leg on us if we ever got behind.
• It caused us to incur late fees when the payment was late.
• It didn’t give us any flexibility with our hard earned money.
• And the list goes on and on…

I hope this gets you to thinking as to why most services have payments after services are rendered.  Sounds like a setup to me. They want you bound; they want you enslaved to their service. In other words, they lock you in, but what if you could change all of that?  What if there was something you could do about it?

Today is Friday!
I know you were looking for the answer, but you’ll have to come back next week to find out more.  In this set of messages, we unpack how to make the shift from category 2 (after services are rendered) payments to category 1 (before services are rendered) payments.

Question: think of what making this shift in how you pay could improve your finances.  Leave a comment.

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