How to Simplify Bill Paying
Do you use late notices as a reminder to pay your bills? Does your
checking account seem to be made of rubber? Irregular bill-paying
habits make you a credit risk, and may jeopardize a future car loan,
an apartment or even a job. The good news is that with some careful
planning and an assertive mind-set, you'll have a bounce in your
step--instead of in your checking account.
- Difficulty:
- Moderate
Instructions
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1
Designate two days per month to attend to your bills, say the first and the 15th, perhaps on the days you get paid. Make it the same time every month and mark these days on your calendar. If your major bills are due at different times, find out if you can change the payment due date. Sometimes you can do this on the company's Web site.
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2
Check your account before you start--you don't want any surprises. Most banks let you access your account balance online, at ATMs or by phone.
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3
Devote a corner of the house, preferably quiet and out of the way, to paying your bills. Ideally, you have a special desk for keeping all of your financial records and checkbook. See 184 Conquer Your Paper Piles.
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4
Label bills "pending" or "paid." As soon as they arrive, place them in a designated bill file for easy access.
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5
Keep a clean checkbook. When you pay a bill, record the bill as "paid" in your checkbook. It reduces the chance of mistakes.
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6
Make fast and easy work of your bills with a program like Quicken (quicken.com) or Microsoft Money (microsoft.com/ money) to keep tabs on your bills. Set it up to provide automatic reminders of which bills are due. A good software program comes in handy around tax time, since all your bill payment records are in one place (see 230 Prepare Your Taxes).
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7
Set up online bill paying with your bank. Most banks let you pay any company or individual in the United States--your credit-card company, the phone company, even your roommate--all from your computer for free or a small monthly fee. Pay multiple bills at once and choose the day when each will be paid. Save the hassle of buying and finding stamps and envelopes.
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8
Go completely virtual and receive your bill online from select merchants such as your phone, utility and insurance companies, department stores and so on. Most companies love to see you pay your bills online. In fact, interest rates for some larger bills, such as mortgages and student loans, can be negotiated downward if you pay online.
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9
Keep it simple. If you're spending more than an hour a month paying bills, it's time to reassess your plan.
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1
Tips & Warnings
If you can't pay an entire bill, send a partial payment so you're not marked delinquent.
Thin out your credit cards. If you're juggling four or five cards, that's a red flag on many financial fronts; it likely means you carry too much debt. Close the accounts and cut up all but one or two cards. You'll get fewer bills and your records will be easier to organize. See 227 Get Out of Debt.
Have your mortgage payment deducted from your bank account automatically. Consider switching from a monthly to a biweekly payment plan. Instead of 12 monthly payments, you'll make 26 biweekly payments-- and pay down your mortgage much faster.
Bill payments shouldn't get in the way of building an emergency fund. If you can't stash away three to six months' worth of living expenses and still pay your bills, that's a problem. See 228 Design a Savings Plan.
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Comments
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chemengg425
Feb 22, 2009
Great suggestions!! -
chemengg425
Feb 22, 2009
Great suggestions!!
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Aug 14, 2006
Please Note: Organized people who are also good with deadlines will find this tip puzzling...but to "organizationally-challenged" people like me this really helps and it's fast and easy! I tried to be as detailed as possible so you don't have to guess what to do when. First, get a marker or a pen, two baskets or stackable clear trays, as well as a monthly calendar that you can put up on your refrigerator or wherever is closest to an area you pass by and will see frequently. If you already use a calendar for appointments use that one. Put the two baskets or stackable trays in a place that's close to the door you use most for going out and coming in (for example, on the kitchen counter near the refrigerator). Mark one "New Bills" and the other one "Bills to be Paid". If you use stackable trays put the "Bills to be Paid" tray on top of the "New Bills" tray. You'll see why in a minute. Pen and calendar in hand, pick the same day and time each week that you will be able to sit and do those "dreadful" bills. Say you pick Sundays at 4 PM: on each Sunday at 4 PM for the current month write, "4 PM - appointment - pay bills - then reward". Also write this on the first Sunday of the next month as a reminder to continue these appointments with yourself so you'll see it when the calendar changes. Next, (this step is important) you must choose a small reward to give yourself right after you've done that week's bills. Pick something you like to do that takes 15 to 45 minutes or so (i.e., relax and read a book or magazine, watch a favorite TV program, go for a walk, open the nice present your spouse gave you for paying the bills, whatever you like). Once you start doing this you'll see that the reward makes paying the bills less grueling--please do not skip it nor enjoy the reward before the bills! On the calendar in each place where you wrote "Reward" write "ice cream" (or "bike ride" or "call friend" or whatever you picked to do). Next: This step takes less than one minute: Each day after you've picked up your mail and brought it in the house to open, stand over a waste basket so you can toss any "non-bills" (junk mail) that you don't want to have cluttering up your house. Then this takes only 30 to 60 seconds: Open the bills. If you don't have time to do the next step that same day, no problem--just put that group of bills in the "New Bills" basket. This takes 5 minutes or less: At least every two to four days take the "New Bills" group and put them in order by due date. Put the one due first on top of the group. In the place where the postage stamp goes use a pen or marker to write a date and day approximately two weeks prior to the due date. For example, if your electric bill is due Thursday Sept 28 write "Mail this by Monday Sept 18" where the stamp will go on the envelope. Put these in the basket or tray labeled "Bills - Pending". When Sunday at 4 PM (or whatever you chose) arrives, grab the "Bills - Pending" pile and pay those bills. Since you're doing this weekly it will take little time. When done, stamp and seal and put those paid bills with your keys or purse to mail the next day. Then don't forget to enjoy your reward--if you do this consistently over time you won't mind paying the bills plus your credit score will improve! I hope this helps you as well as it helped me!
