In this week’s poll you said you wanted more information about finances, so here goes!
Paying bills is one of the least favorite things anyone has to do. Who likes sending money out of their checking account?! But it is a necessary part of life. And, like a lot of things, without proper organization it can be more work and cost you more money that it should. Here are some tips to organizing your bills.
#1. Get an organizer. You don’t have to invest in a specific bill paying organizer, but I recommend getting something to sort and organized all your bills. Some people use a small file box, others an expandable folder, some a desktop organizer. I recommend the Bill Organizer by Crown Financial Services. It does the job well in a small space. But the organizer isn’t as important as simply having one place where all the bills go.
#2. By Due Date or Category? Most bill paying organizers come with options to organize by category (house, car, insurance, utilities, etc) or by due date. I am a fan of organizing by due date because this way you don’t have to remember when a bill is due and what category you put it in. As you get paid, you can sit down and pay the bills that are due between that day and your next pay period. Over the years I have tried and taught both systems and by due date is my (and others) overwhelming favorite.
#3. Pay on time! This may sound like a no-brainer, but it isn’t always, especially in this economy where many of us have to make hard decisions about where to spend our money. But do everything you can to pay your bills on time and avoid late fees, penalties, and interest. Be sure to allow time for mailing or online payments to be sent so that your payment arrives before the due date. If you cannot pay the full amount due, send something and contact the company to work out payment options.
#4. Record payment. When you pay a bill, record on the stub when you made the payment and how much you sent. If you mailed a check, record the check number. If you sent the payment online through your bank’s bill-pay website or the company’s website, record confirmation numbers. Keep all this information until you get the next bill that shows your payment was received and properly applied. I simply shred the old bill when the new statement arrives and I file it.
#5. Balance your checkbook! Yes, this is not specifically about your bills, but it will help you with them. By keep track of your checking account, you will know right away if a payment wasn’t received. You will also avoid costly overdraft fees because a bill was paid and you didn’t have it covered in your account. For more on this see Balancing Your Checkbook.