Paying the bills

Brown envelope syndrome
It is easy, at any time, to get slack about keeping paperwork up to date and after the upheaval of a divorce, possibly a house move and a general need to re-evalute your life it is understandable that some things have had less attention lavished on them than they deserve, or need. It could be, of course, that your former husband or wife took sole care of the finances and that it is simply an alien world to you to have to think about writing cheques, setting up direct debits or saving for that mythical rainy day.

Even if finances are in good shape in your life after your divorce, financial prudence will enable you to enjoy your new circumstances without worrying and to make sure that you have some backup if you fall on hard times through redundancy, illness or retirement.

Don’t put things off. Make a fresh start and give yourself plenty of time to sit down and sift through accumulated paperwork. Centralise and collate all your bills and statements if they are scattered around the house, throwing away anything that is more than a year old and putting everything into separate folders so things can be located quickly if necessary. Make a budget and set yourself a goal.

Where appropriate, set up direct debits to pay bills. It means they will get paid on time and you are less likely to incur penalty charges for late payment because you have forgotten to pay something. Set up a savings account and try to pay something into it every month, even if it is a very small amount it will get you into the habit if you have never saved before. 

Price comparison sites can help you save money on utilities, phone contracts and insurances.

Some facts about direct debit
Around half of all regular bill payments are made using direct debit with three quarters of mortgage, cable and satellite payments paid by direct debit.

Some companies will charge customers, who opt not to use direct debit as a means of payment, more.

If an error is made by the bank or building society responsible for paying a direct debit or the company in receipt of the payment you are guaranteed an immediate and full refund.

The company or person in receipt of a direct debit payment has to notify you ten working days before any change in the amount to be paid (if gas prices increase for example) comes out of your account.

Paying by direct debit can often, but not always, save you money. Car insurance for example can end up costing you a whopping extra 20% (or more) a year if you pay with direct debit.

How do I set up a direct debit payment?
In order to make payments by direct debit you must have a current account at bank or a building society. You can usually sign up to direct debit by phone, online or by filling out a direct debit form that comes with a bill. You can choose a payment day that suits you and an agreed amount with the company or the individual in receipt of the payment.

How do I cancel a direct debit payment?
You can change or cancel a direct debit at any time by notifying your bank or building society in writing.