The thrill of taking myself, my dependent and my work abroad for the summer was somewhat dampened when I realised that I had to make provisions for various outgoings to be covered while I was away.
In my case this means a slew of post-dated cheques being deposited in various locations. All fine if the amount is a “known known” – such as a monthly life insurance payment for example, that can be left with a responsible person who would make sure it was deposited on time – like the outfit that sold me the policy. But what if it’s an “unknown known” – say a monthly credit card bill? Or if a cheque needs depositing with a bank and they won’t take it in because the date on it is too far in the future (a month or two).
Mine is not so much new economy as old tech – for all the talk of going digital and e-services, my reality is that I cannot pay my credit card bill online – the card issuer hasn’t sorted this out with my bank. This means that I pay my monthly bill via cheque at a machine closest to where I live. It invariably doesn’t work on key end-of-month days, which has occasionally meant a mad dash to my bank to withdraw cash. Credit card bills usually exceed my daily withdrawal limit, which is an utter pain and disrupts my plans for the day – not to mention the hell of dealing with the heat at this time of year. But back to getting my finances in order while I’m away.
Tying up loose pre-trip ends meant that I could have all outgoings covered with post-dated cheques with specific amounts on them bar two liabilities. These needed addressing.
Liability 1 is the credit card bill due while I’m away – for this I deposited a post-dated cheque in said machine – the amount on it is a guesstimate. An over-guesstimate I should say. Better safe than sorry.
Liability 2 is the monthly payment for one of my policies – this will be a couple of weeks late – because the bank they deal with won’t take in my postdated cheque. I informed them and all is fine. Phew.
Yes I could make some of these payments online, but if you read a recent post, you’d know that my bank’s online facility has been a challenge in the past and I don’t want to take the risk – or be put through the hassle while I’m away – of things going wrong. Add to this that the charges I’d incur would be significant.
Online banking has improved in the UAE, but fees vary such a lot – from zero if it’s within the same bank to about Dh100 for overseas transfers. So you can see how, if you have monthly payments for life insurance, savings, pension and any other policies, it can add up to a chunk of disappeared money.
Bills going unpaid can happen for many reasons, including: forgetting the due date, prioritising other payments and simply not having the money. In the UK, one in five people missed a payment in 2013. This amounted to 15 million missed payments – worth a total of £882 million (Dh5.04 billion) – over the course of the year. The consequences of missing payments can include credit scores being affected, fines accumulating, policies being cancelled and not being able to take out a loan in future or even having a legal case lodged against you. The bottom line is that our intentions, or our ability to pay, aren’t what count – what does count is paying bills on time.
Even if we have the money in the bank, we don’t all have support networks like a partner (usually a wife) or a PA to pick up the slack, when we can’t make payments. Say a work trip has been extended, or you want to escape the heat for a couple of months. And so perhaps “ease of payment” should be a top priority – not how many Skywards miles can be had – that way, trips abroad can be less stressful and a bigger thrill.
Nima Abu Wardeh is the founder of the personal finance website cashy.me. You can reach her at nima@cashy.me.
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