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What day of the week is it?
I’m guessing that in spite of your tangled work-at-home schedule, with one day blending into the next during the quarantine, you are still able to answer this question correctly.
How about if I ask you which day of the week the first of next month falls on?
Unless you happen to be reading this at the end of the month or staring at a calendar, this answer probably isn’t on the tip of your tongue. I ask this question to groups all the time, and only once has anyone ever had the answer within a few seconds.
Yet nearly every landlord in the world expects their tenants to pay their bill, and budget around, the first day of each month. Why?
Does this day correspond with when you get paid? Nope. Are other monthly bills always due on this day? Not a chance.
Unfortunately, in more than a decade as an owner and manager of hundreds of residential properties, I’ve seen multiple occasions where households living paycheck to paycheck decide to pay a utility bill or even a cable bill before they pay their rent. In some of these cases, it’s led to an eviction. The first few times I saw this occur, I wondered why a tenant would ever prioritize their cable or electricity bill over their rent payment for the apartment or house that was the vehicle for these services. It took me some time to realize that they pay these bills first because that’s either when they were due, or when the collections agents called about potentially cutting off the services.
A tenant’s methods to organize and pay multiple bills on very modest income is based on a house of cards. They hold out hope that if they can pay just enough to avoid one creditor, they can get that paycheck, or that cash that was owed to them, in enough time to pay the rent. For many, these hopes never materialize, and they end up being evicted as a result.
When I started creating weekly bills for residents, I found that the cadence made budgeting significantly easier for them. And miraculously, weekly payment plans to repay past due balances netted substantially higher payments than the typical monthly rent — even without any increase in income. On one occasion, after a resident had been able to save enough money to purchase a car, I received a personal thanks for “teaching her how to budget” even though I hadn’t actually done anything other than set up weekly billings.
How could this be possible?
Because even though almost no one knows what day of the week the first of the month falls on, nearly everyone knows when Friday is. And it’s incredibly easy to build a budget around paying every Friday, or any other day of the week for that matter. We don’t live in 28-to-31-day increments. We live day to day and week to week. And just like I know that trash pickup on my street is always on Thursday and that church is on Sunday morning, I would also have a much easier time remembering if I had a payment due the same time, every week. Because it’s so much easier to remember, it’s also much easier to budget around.
Now, what if we combine different bills — rent, electricity, internet, water — into a single weekly payment? In doing this, I’ve also seen that residents are much more likely to make this payment, and much less likely to lose either their housing or utilities. Meanwhile, landlords and property owners receive their payments on time and in smaller increments, so they can more easily track which residents are serious about making rent payments.
The only real question is why virtually every landlord continues to bill monthly.