I’m writing this on my bill paying day, so it got me thinking. Paying bills is an important part of our financial lives, maybe one of the most important parts, so I’m wondering what is your bill paying strategy?
– Do you pay your bills right when they hit your mailbox?
– Do you have a set time every week or every payday to pay your bills?
– Do you pay them haphazardly – whenever you happen to have a minute? Or a few “extra” bucks?
– Do you pay bills on-line or through the mail? Please tell me you don’t drive around town dropping payments off at various locations? My in-laws used to do that, but hey, they were retired and didn’t have anything better to do with their time.
Do you rely on your husband, partner, or parent to handle this little chore for you? That’s certainly the easy way to do it, but if they weren’t there, would you know how to take it over? Do you think they are doing a great job of it or could you do it better? I’m not trying to start any matrimonial holy wars here, but possibly your spouse might appreciate it if you took an interest in the bill paying once in a while. Legally, these are your debts too and you have a right and an obligation to know at least a bit about it. It might be a real eye opener for you.
I have to say, after many years of trial and error, I have become something of a fanatic about bill paying. When we were first married, I tried leaving it up to my husband. Bad strategy. To this day, he has a very “relaxed” view of paying bills. His philosophy is that he will pay them when he is darn good & ready rather than when they are due. Uh, yeah Sparky, the world doesn’t really work that a way.
He came close to ruining our credit rating during our first few married years. Finally, I got him to realize that even though his male ego wanted to handle the money, he really wasn’t the best person for the job. In my early twenties, I wasn’t all that responsible either, but of the two of us, I was at least slightly better at it. Over the years I did a lot of trial and error until I got our bill paying system under control.
I know a lot of people rely on various budgeting systems – envelope systems, or spreadsheets with categories, even online applications like Mint. I have tried some of these options, but I hated them. They felt so restrictive and just made us both unhappy. We needed something simple that allowed us a bit of latitude on everyday spending while still keeping on top of the bills. I would like to try some of the online systems – I am an Accountant, after all and I love playing with numbers, but I’m always a little freaked out by putting all my information in one place. There have been so many security breaches lately….
My simplest move was to stop pying my bills in the middle of the pay period (or worse, at the END of the pay period) and start paying them the MINUTE I get paid. That works out so much better! Now, I always pay my bills and buy our groceries as early as I can in the pay period. That way I know exactly how much money I have left for everything else – clothes, eating out, stuff the kids need for school, books, or even frivolous stuff.My simplest and best move was to start paying my bills the MINUTE I get paid. Click To Tweet
Of course there are always unexpected expenses that pop up just about every pay period, but I have emergency savings to cover that. (By the way – emergency savings means doctor bills, car repairs, and unexpected school fees, NOT those cute shoes on sale at Kohl’s or an unplanned dinner out with your girlfriends.)
I’ve paid my bills on-line for many years and I highly recommend it. Not only does it simplify your bill paying, but it allows you to pre-schedule bills on a monthly or quarterly basis that you might otherwise forget about. We have some insurance premiums, and other bills that only show up once a quarter and without this system, it would be easy to overlook those bills in our never-ending junk mail pile. But instead, I get a faithful reminder every quarter that these bills are due. So much easier.
It also makes it easy to calculate your bill load each payday, so you can adjust them in a way that works for you. In my particular system, it shows my current account balance off to the side and calculates how much money I’ll have left as each bill is added, which I find particularly handy.
Are there pitfalls to paying bills on-line? Yes, there is one and I ran afoul of it just this last payday. You can accidentally overpay or double-pay a bill and when you do, it is nearly impossible to get the money back, especially if it is a revolving account like a credit card bill. I accidentally paid one of our bills twice, even though there is a little warning marker to stop you from doing that. But they were paid on different dates and I didn’t notice it. Fortunately, it was only $50, but still I’ll be more careful next time.
And I don’t have to pay postage, or lug around stamps & envelopes, and I never have to worry about someone stealing my checks out of my mailbox. Plus I have an exact record of what I’ve paid going back for several years. It only takes me about 15-20 minutes every payday, and it gives me such peace of mind to know that everything is taken care of for the next two weeks.
Here are a couple of products that you might find helpful for getting your bill paying system organized. These are some tools I’ve found helpful for me.
A word about minimum payments. The word is NO. You don’t ever want to pay the minimum payment on an account unless you are totally in financial survival mode. I don’t know how they set those things, but if you’re paying the minimum payment, you’re just about wasting your time! I actually have a great post about credit cards and minimum payments – The TRICK to Minimum Payments.
So take a careful look at your bill strategy. What are you doing well? What can you do better? Make it a game to outsmart those credit card companies. Do like they do on TV and make a big red thermometer chart or one of those big graphs. I keep mine on post-it notes on our master bathroom mirror. No one goes in there but us, and it’s nice to see those post-it notes going away as we get accounts paid off.