Definition
A set amount of time after a payment is due when you can still pay without incurring penalties. It gives you a little extra breathing room.
What to consider
- Take advantage of extra time to make a payment without penalty.
- Use it as a buffer during tight months.
- Keep track of the expiration to avoid late fees.
Real world scenarios
- Andrea forgets to pay her credit card bill on the due date but settles it within the grace period, avoiding any penalty.
- A utility company grants Nelson a five-day grace period, letting him align his paycheck with the bill without incurring late fees.
- Sheila uses her mortgage’s short grace period strategically, paying just before the cutoff to keep cash flow smooth.
Related terms
Related Playbooks
Get instant access to all our expert playbooks and 1-1 financial coaching when you join the Bolder Money community. Learn more here.
Budgeting & Spending
Creating Your First Spending Plan: A Step-by-Step Guide
Budgeting & Spending
Healthy Online Shopping Habits Blueprint
Budgeting & Spending
Healthy Food Spending Habits Guide
Budgeting & Spending
Smart Gift-Giving Strategy Guide
Budgeting & Spending
Smart Strategies for Cutting Back Expenses
Budgeting & Spending
Zero-Based Budgeting: Your Guide to Intentional Spending Success
