I would like to target this lesson toward my younger visitors. Because I feel its message can make a real difference in your life if you follow this simple piece of advice.....ALWAYS pay every bill and financial commitment you make PROMPTLY! While this may seem like a simple conventional wisdom to follow, not enough people understand the power of paying promptly!
My own personal experiences as a consumer and business owner, has taught me how important this discipline can be throughout one's life. Being known as a prompt payer will open many doors of opportunity that are just not available to individuals who pay slow or are on the delinquent list of their vendors or suppliers. Throughout my lifetime, I have taken many business courses and attended many seminars and workshops. Unfortunately this topic rarely if ever is discussed.
Let's begin our discussion on the personal benefits of being a prompt payer. Being conscientious about your financial commitments builds good character. Everyone wants to look in the mirror and see the reflection of a person with high self esteem and a reputation for being honest and trustworthy. I have known many individuals who dodge their creditors. They lie to them and often try to cheat individuals or institutions such as banks or finance companies out of money. That's the quickest way to destroy your self esteem. Not answering the phone calls from creditors is both dishonest and in many cases illegal. Once a person develops into a bill dodger, they will enter the world of fees, penalties and legal action that is difficult to emerge and recover from.
All banks, credit card companies, utility companies or just about any business or enterprise wants customers who pay promptly. There are often special deals and prices for those who pay in advance and the savings can mount up handsomely throughout one's lifetime. One example is my magazine subscriptions. I pay for around 20 magazine subscriptions three or four years in advance and buy every magazine at 80-90% off the cover price. I also get discounts from other subscription based vendors like alarm monitoring services by paying a year in advance. This saves them money by not billing and posting a check monthly and allows me a discount.
As a business owner, my company extended credit to thousands of small business owners. We would check the credit rating of every applicant who applied for an open line of credit. Our best deals, prices and promotions were always extended to those who paid promptly. Those with lower credit ratings were cautiously watched and given very low lines of credit. They were not viewed in the same light as the prompt payers. Thus prompt payers tended to be rewarded handsomely as customers and over the course of their business careers, the dollars they saved added up to huge sums of money.
Also as a business owner, we worked diligently at our goal to achieve and maintain THE HIGHEST Dun & Bradstreet credit rating. By doing so, we displayed our financial strength to the entire world of vendors of products and services. Whenever a new product or service was introduced into our marketplace, our company was usually the first to be called by the new vendor. This gave us an advantage over our competition, to accept or reject the new product. It also gave us the leverage to purchase the product at a lower price, because the vendor knew that there was little financial risk in selling our company. Our strong reputation for paying promptly would enable us to purchase under the best terms and conditions.
Because we worked just as diligently at collecting our own accounts receivables quicker than our competitors, we were able to pay some of our distributors earlier than their stated billing terms. For example if their billing terms were 2% 10th Prox, (meaning we could discount our statement by 2% if they received our check by the 10th day of the month, we would make a deal with some suppliers to pay them 5% 5th Prox. By paying 5 days earlier, we enabled our distributors to pay early and get extra discounts. It was a win-win for both of us. Over the course of our business careers, all the extra discounts we negotiated and earned by paying promptly added up to huge savings.
These are just a few examples of the power of paying promptly. There are so many ways you can benefit as a consumer or business owner by leveraging this simple discipline. I sincerely believe that individuals have a better chance of developing this discipline at an early age. Being a stickler about paying promptly early in life will enable one to carry this discipline into every phase of their career and life. Starting early will also allow more years to reap the powerful benefits, in order to achieve a higher level of financial independence later in life. Get organized early in life regarding your bills and financial commitments. Pay Promptly! And reap the benefits for decades.