Every time I have been late paying a bill, it wasn’t because I didn’t have the money, but because I forgot about it! My hunch is that most late-fees occur for that same reason. Back in those days when I lived in financial chaos, I didn’t have a system in place to help me remember to pay my bills.
For me this was just like playing roulette with my bills – I remembered to pay them sometimes and sometimes I would forget. It goes without saying that paying bills late (especially for credit cards) is terribly expensive. Most credit card companies charge something like $40 each time it is late as well as jacking up your interest rate to 25%.
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Batching the Process
Anyone who has ever forgotten to get something from the grocery store realizes that it requires a lot less time to buy everything one day than having to go get something as you need it. It requires a grocery list and a bit of foresight, but it saves you hours throughout the week by NOT having to go back to pick up missed items. Why not implement the same type of planning to the paying of your bills?
Rather than sporadically paying them as they come in, or checking a pile on your desk every few days, you should be able to designate 2 days a month to pay your bills. And of course, if you want to save even more time use your bank’s online bill pay.
4 Steps to Manage your Bills
- Make a list of all of your bills. Next to each one write the day that it is due. If there is not a due date just leave it blank.
- Decide on 2 days per month that you will pay your bills. I recommend the 2 days you when you get paid (if you receive a regular bi-monthly check).
- Organize them by due dates. Assuming the days you get paid are the 1st and 15th – you would then take all of your bills due the 22nd through the 6th and pay these on the 15th. And on the 1st of the month you would pay the bills due from the 7th -21st. This will give each bill at least a week to get to through the mail.
- Figure out what your monthly dollar amount needed for bills is and divide it by 2. If your monthly bills total $2000, then you will want to pay as close to $1000 worth of bills on the 15th and $1000 worth on the 1st. Use the bills that don’t have a due date (i.e. savings accounts) to balance this out as best as possible.
Download a bill pay template
To see an example, download my bill payment schedule Excel spreadsheet. I also suggest having a designated checking account specifically to pay bills from. That way you can know exactly how much comes out (the monthly total of your bills), therefore you can know exactly how much to deposit.
Of course if your bill paying days don’t balance out perfectly (paying $1000 both days) don’t spend the money! If you paid $700 this time, you know you will have to pay $1300 next time. If you don’t touch it, you know it will be there waiting.
A new way for managing your bills
If you are looking for an easier online solution, MoneyStream is a website that organizes your bills for you automatically.
How it works
You start by linking your accounts to MoneyStream. The site uses bank-level security to keep all your information safe and private. MoneyStream automatically detects when your bills are due and then adds them all to one calendar so you can see them all in one place.
Here are a few more features from their site:
- Smart technology analyzes your spending history and finds the repeating payments
- MoneyStream combines it’s expertise with your specific instructions to catch unusual activity
- Be alerted via email, text message, and on your MoneyStream dashboard
- Easily see your income and bills for the month to see how much extra money you have
- Sign up for MoneyStream and get your accounts linked OR…
- Follow steps 1-4 above and get your bills organized!