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Mistake #3: Paying bills late, due to lack of organization or forgetfulness. Sometimes people get behind on their bills, but it’s not because they can’t afford to pay them. They just forget, or are too busy doing other things to open the mail. Before you know it, a month could go by, and they’re late. This is a mistake that’s easily easily prevented, but it can be costly. A single bill that’s 30 days late can activate the universal default clause on credit cards, skyrocketing your interest rates. It can also damage your credit for years, resulting in higher interest rates. It could even prevent you from being hired in certain jobs, if they then view you as irresponsible.

Solution: The easiest solution is to pay your bills automatically. You can use your bank’s online bill pay, or authorize the individual accounts to draft payments automatically either from your checking account or from a credit card. Using a credit card may be a safer way of setting this up, because you can dispute things if there are unauthorized charges, but you also then have to remember to always pay the credit card in full each month. I have things set up to come directly from my checking account, and to date I haven’t had a problem with it. Another solution is to schedule your payments by due date and amount on a calendar or spreadsheet, and then set aside a regular time to make the payments. You could also pay all of your bills on the 1st and 15th of the month (or whenever you get paid) regardless of their actual due dates. You may lose a little interest by paying them early, but that’s nothing compared to what you’ll be saving in late fees and damaged credit.