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%.
How to pay the bills
One of the first steps I took to get my financial life in order was to create a schedule to pay the bills. Essentially what I did was decided to pay all of my bills every 2 weeks. Rather than trying to time it so that each bill got paid a day before it’s due date, I just batched them and sent them out twice a month.
I started by writing down the due date of each monthly bill I had in a spreadsheet and then grouped them by date. On the first I would pay all the bills due from the 7th to the 21st and on the 15th of each month I paid all the bills that were due from the 22nd to the 6th. Feel free to download a copy of the Excel spreadsheet that I use to schedule them.
How it helped
There were a few benefits when I finally established a schedule for my billpaying…
Sense of control
After I had this system in place, I finally (for the first time) began to feel in control of my finances. This was the first step I took to controlling my money, rather than having it control me. Honestly after this was set up, I began to look forward to paying the bills. Weird, I know.
No more late payments
After setting up the schedule, I don’t think I ever had a late payment again – to this day.
Saved time
Previously I would pay individual bills on 7-8 days in the month. So that was twice a week that I had to sit down and spend time on my financial affairs. By batching it to twice a month, I started saving at least an hour or two each month.
Simplicity
I love keeping things simple and this helped greatly. Now I only had to think about my personal finances two days out of the month. Chaos seemed to be eliminated and paying the bills became simple and easy.
Final thoughts
While this is pretty simple and probably common sense for some, it wasn’t for me. It turned out to be a monumental help and worthwhile activity for me. I am sure there are a 100 other ways to pay bills, but this is what worked for me. If you are having trouble paying bills on time or are just looking to organize things a bit, I encourage you to give it a shot.
Do you have a system in place for paying bills each month?
{ 20 comments… read them below or add one }
Great post! My wife and I started something like this a few months ago and wish we would have started it years ago. It really helps if you are paid bi-weekly.
You are so right about this! I just started scheduling reminders on google calendar, since we use gmail, and so far it is a great tool.
Being able to pay bills online to my bank has helped out a lot. I try the best I can to automatically pay the bill the second I get the bill, so I don’t have to worry about it. And paying online takes seconds literally to do so. Whatever method you have set, the important thing is to pay right away so you don’t forget.
My wife pays the bills so I can’t speak to how she schedules paying her bills. At church, I use Outlook calendar to set up bill reminders. It really saves me for bills that I either don’t get an invoice for….. or bills that are automatically deducted from the church’s account.
Too often people take their finances for granted and do not consider a plan for bill payment. They plan for other things such as going to the restaurant with friends, the cinema, going to work at a particular time, etc. However when it comes to their financial life in most cases there is no plan – for savings, spending or emergency. What then happens is that chaos reigns and they find themselves in a position where they should not be.
This is almost exactly what I did to first exert some control over my income… simply list my bills and group them by due date and by which pay period would be responsible for them.
Almost instantly I felt greater control and never had another late payment of NSF.
I’ve since automated many of my recurring bills (NOT CREDIT CARDS) along the same pay period patterm and this part of my budget management is a snap.
Since I’m no longer spending effort or discpline in these areas of my budget, I’ve been able to ‘invest’ that energy to debt reduction and wealth building ideas and various tracking techniques.
Great info and truely the first step to taking control.
Thanks!
Dave
this is an excellent idea. i began doing this some time ago, but not my due date. i get paid twice a month and my rent (now my mortgage) is due on the first. All utilities, etc come from my first paycheck of the month; regardless of due date and my mortage comes from the last paycheck. i have not had a late bill or a late fee in over 5 years! it makes me feel good to be responsible and it does take a lot of the pressure and time from paying bills. oh and my creditors (including utility companies) appreciate the early payments too. i’ve actually got some deposits waived on utilities when i purchased my home because of my great payment history.
Hey! I agree that paying your bills on time does give you a sense of control. I pay my bills online, that’s the system I have in place. I use Billeo. It is a lot of help and free too!
For me, on line banking and automating as much as possible keeps fees away. For the bills that do come in I enter them into bill pay feature. While I am in the system I look to see what activity has been hitting my account. Just a quick santity check at the debits and credits.
I’ve been using this spreadsheet for about six months now myself and shared it with a co-worker who was paying alot of late and overdraft fees. I also helped him set up most of his bills on automatic payments. He currently doesn’t have any overdraft fees or late fees. He said this is the first time he has ever had a schedule like this to see when all of his bills are due. Thanks for sharing this tool.
Carolyn, that is great to hear that it has been helpful to you – thanks for sharing!!
Google Calendar is a great tool for bill scheduling and reminders. I have one calendar set up with all my recurring bills in it. You set it up once, and it can remind you in a number of different ways. You can just open the calendar and take a look, it can send you an email at an interval you set prior to the due date, and/or you can have it do the same thing with a TXT message.
My bill “appointments” contain the links of online bill-pay links if applicable, so that when the reminder comes to my inbox, I just click on the link within and it takes me right to the correct place to pay the bill right then and there. Any non-recurring bill can easily be added to the calendar as well.
It’s completely changed how I pay my bills! http://calendar.google.com
I still pay my bills a day at a time as they come in. I do use online bill pay, so I schedule them to be paid on the due date or before. Although this is less efficient, I have a personal need to mark things off my to-do-list (OCD?). I would not be able to stand to have a stack of bills sitting on my desk for a week while they waited for bill-paying day.
I’ve been running my business and personal bills through Billstrust.com . It’s the ultimate for people just wanting to get the bills out of their lives quickly but without having them paid until the due date arrives. It’s a real time saver, the only thing is they charge a credit card fee, but I still get the points unless you link a direct debit authority with your account.
I also track my daily expenses through trusty excel spreadsheet, I wish i could find something that automates that process then i’d have the full picture of outgoing accounts without having to do much.
I like this idea. I’ve been using online bill pay through my bank, but I’m trying to find a better way to structure my bill paying that will allow me to use my money more wisely. I think this will help. Thanks for sharing.
I split my month into 4weeks and pay certain bills in certain weeks. I even devide my mortgage into 4 so that I’m sure to have it when it is due at the beginning of the month. I have as many bills possible on automatic payment from the bank. I pay online also. This helps me make sure bills are paid on time. I can predict how my money is working for me. On 5 week months It goes into savings or into next months bills.
I got so excited when I saw this. Knowing how to divide up the bills is the part that makes me very anxious. But I’m not sure how to apply this to our pay schedule.
I’m paid every week and my husband is paid every 2. So, obviously every 2 weeks we have more money, the only thing is I don’t know how to adjust this method or use because his pay date changes. It isn’t the 1st and the 15th of the month. This leaves us with rent and larger bills coming out of the smaller week. We’ve tried divding the bigger bills up by 4 weeks or so, but that doesn’t seem to work (and stresses me out) do you have an suggestions? Or anything that I am missing?
The monthly bill pay schedule and the envelope method has changed my life forever. We have been forced to move out of california due to a layoff and my Fiance’ is in another state with her parents while i get us set up here. Until the middle of october this year, We had never ever been in complete control over Our finances. Now, We have over 3000 saved up, all bills are being paid at least a month ahead and i expect that to keep snowballing. We also have a snowball debt payoff spreadsheet chart that i had created showing all minimum payments and putting the extra from each paid off, towards the next smallest to pay it off and man is it runnin fast! Also a quick note. I never tithed regularly before getting on to this website. The very first time i tithed, We received an unexpected vacation check around 700. The next month a tithed again whih was november, WE ARE RECIEVING A 900 DOLLAR CHECK FROM AN INSURANCE COMPANY THAT SAVED FOR US WHILE WE HAD THEM AND! AFTER DRAWING UNEMPLOYMENT FOR ALMOST A YEAR AND UNABLE TO FIND A CAREER, IVE BEEN HIRED AND WILL MORE THAN LIKELY BE A PLACE I RETIRE FROM! THANK OUR GRACIOUS FATHER IN HEAVEN!
This is exactly how I have been paying my bills for the last few months. It has been a life saver. We get paid on Fridays so on Mondays I set up all my bills that I can pay to be sent by payday.
The best part about having a separate checking account for bills is that I know exactly how much to put in there, I don’t have money sitting around with the temptation to spend it. I also don’t spend my money set aside for bills on accident. Something I had a big problem with, specially when sometimes the money isn’t debited right away.
I have had a schedule for paying bills for many years. I devide the month up into 4 weeks usually using the friday payday as the date. Then , on each week I list the bills due that week. They typically are on the same day each month. I also put my mortgage in each week devided by 4 so at the end of the month I have all the money I need to pay the mortgage. ( it floats in the checking account as paid, but you right the check when due). You can set this up months in advance. You can have automatic debits come out too. You just cross them out when they are paid. You can see ahead of time if your finances are working for you. Our pay is not the same each week. My husband gets paid opposite pay periods( how convenient). It’s worked for us.
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