I’m writing this on my bill pay 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.
– Or do you have everything set up on automatic payments? Yes, it’s convenient, but I hate having people just reach into my account and take my money whenever they feel like it. It’s great for them, but BAD for you if they overdraw your account.
Who is Responsible for Bill Paying at Your House?
Do you rely on your husband, partner, or parent to handle your financial organization 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 situation 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 and 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. That really helped us to become debt free.
Systems for Paying Bills
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, 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. Plus I worry about linking up any of my accounts online. Data breaches happen to often these days.
My simplest move was to stop paying 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. That fairly simple tweak made an ENORMOUS difference in our financial situation.
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 used Wells Fargo’s online bill pay system 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 with this system, 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 and 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.
Products for Bill Paying
Here is a product that you might find helpful for getting your bill paying system organized. This is a pretty cool Printable Financial Planner I put together to help my debt-free clients and I think you might find it helpful as well.
Learn more and purchase your copy from my sales page – Printable Financial Planner.
Outsmart the Credit Card Companies
A word about minimum payments. The word is NO. You don’t ever want to pay just the minimum payment on an account unless you are totally in financial survival mode. They set these minimum payment amounts VERY carefully to keep you in debt for as long as possible. So, I think minimum payments are for SUCKERS. 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.