When it comes to good money management, facts are facts. You have to face it head on, eyes wide open, deal with the real numbers, pay attention, keep track, and get real. Tough love will make you rich! Or at least keep the wolf from the door. This method is from a few years ago but it will still be applicable if you want to get a grip on your finances.
If you would like tips and tricks for lowering the cost of your bills, see: How to Lower Your Bills and Save Money.
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A Solution for the Bill Payment Problem
I don’t know about you, but I find that the transition from paper to online billing has been anything but smooth. If all of my bills were available in the same format, and paid the same way at the same time, it would be fine. But they’re not. And it’s can be tricky to keep track of everything and make sure bills are always paid on time.
The good news is, I came up with a system that keeps everything paid on time and well organized (without some complicated filing system).
The problems are:
- Some bills are paperless, some are not.
- Some bills can be downloaded into spreadsheets, others are PDF only.
- Some bills can be paid automatically through the bank. Others have to be entered manually.
- Some bills can be paid automatically by credit card, others can only be paid by cheque.
- Most bills have consistent due dates, but occasionally they change when you least expect it.
The Bill Paying Solution
To make it easy, I came up with a system that makes my bill paying really simple, catches any errors or discrepancies, and ensures we never unknowingly pay late fees or interest. It’s actually just an updated version of a reliable old system that many people have used for years.
This should take about 30 minutes to set up.
How To Organize Your Bill Paying System
I’ll show you how to create a bill paying checklist where you will keep track of every bill payment, each month, for the entire year. Once you’ve set this up, you can simply do your bill paying twice a month on autopilot, confident that you’re not overlooking something.
Step 1 – Gather the Information
The first step is to sort all of your bills into payment groups. While this may be a bit of a headache, the good news is, in the end, you will just need to deal with your bills twice a month.
- Make a list of every bill you pay. This may be the hardest part for those who are not so organized now.
- For bills you receive by mail, gather a recent copy of each one to refer to.
- You will also need to lookup your online bills in Step 2.
- Bills may include items such as telephone, mobile phones, cable tv, internet, electricity, water, natural gas, credit cards, home and auto insurance, property taxes, loan payments, and health insurance.
- Even if bills are paid automatically, you’re going to include them in your checklist. This way you will catch any discrepancies and not pay extra to The Man.
Step 2 – Write A Master List
Next, sort all of your bills into categories and create a master list. This information will help you create your checklist but you’ll probably want to write it out in draft form first.
1. Assign each of your bills to one of the following groups – are they paid monthly, quarterly, or annually?
2. Record the earliest date of the month each bill is available to you (by mail or online).
3. Record the date each month that each bill is due.
4. Do you receive a paper bill or view it online?
Step 3 – Sort Into Three Groups
You’ll want to refer to my sample to understand this part. Sort the bills into their payment groups. Again, include every single bill, whether it’s paid automatically or not:
Group a) = bills available and payable from the 1st to 15th of the month.
Group b) = bills available and payable from the 16th to 31st of the month.
Group c) = bills paid quarterly and annually.
- If they don’t fit into the date groups I’ve suggested, create your own.
- The trick is to identify time periods where you can both access the bills and can pay them without being late.
- My bills fit nicely into two main groups. I can actually pay Group a) bills from the 13th to 18th and Group b) from the 25th to 30th. This allows some flexibility with my time.
- Quarterly and annual bills are simply added to the current payment pile and visible on the master checklist.
Step 4 – Create Your Bill Paying Checklist
Now that you’ve got your payment groups, fill in your bill payment checklist. This will act both as a checklist to follow and a record of all of your bill expenses.
1. List your bills on the checklist in order by Group (a, b, c). You can see an example here.
2. If you pay for more than one service on the same bill, use a separate column for each item (cable tv, internet, etc.). This makes it much easier to catch discrepancies.
Using the information you have gathered:
3. List the dates the bills are both available and due.
4. List whether the bill is paper or downloaded or other.
5. List how the payment is made: direct withdrawl, cheque, paid through the bank online, paid automatically by credit card, or whatever methods you use.
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Keep every single paper bill you receive in one spot. Simple. No need for a bunch of file folders and labels and do-hickeys.
Bill Paying Routine
You’ve now identified two time periods each month where you need to deal with your bills. Even if you don’t have to process any payments in one of these time periods (because they’re paid automatically), you still need to download your bill copy, record it on your checklist, and ensure that the amount is correct. Money is time, people. Don’t waste it!
1. Refer to your checklist to see which bills are due in the current lot. Gather all the paper bills and download the online ones. I keep the electronic bill downloads in directories by type, and rename them so they’re automatically sorted by type and date (e.e. electriccompanyname_2012_02_Feb).
2. After paying each bill, fill in your bill payment checklist, noting every amount paid, confirmation codes (if paid online) and a check mark indicating you downloaded a copy.
3. Keep your paper bills together in one pile for the entire year with the checklist on top. No file folders or sorting needed. It saves time and keeps everything right where you can find it. The pile of bills together with the checklist on top makes it very easy to find what you need.
Watch Your Payment Dates
Some bill due dates fall on weekends and holidays. If paying electronically, I set the payment date for a weekday (that is not a holiday) at least one day prior to the due date. This avoids late payments (and arguments) that will waste my time trying to get any late charges reversed.
My entire life is in my gmail calendar! Or at least any routine tasks like this that I have to remember to take care of on specific dates.
- Group a) and Group b) bill payment dates are entered as ongoing monthly tasks.
- I also note when our cable tv, internet, home and mobile phones, and home and car insurance agreements or contracts expire. I post reminder notices to myself in my calendar to pop up a month ahead of the deadlines so I have time to research what deals and promotions are available before calling in and requesting better rates or arrange to switch companies.
See How to Lower Your Bills and Save Money for more tips and ideas.
- Organize all of your bills into payment groups that can be handled just twice a month.
- List all of these bills on a checklist so you can easily see what has not been paid or where you may have been incorrectly charged.
- To avoid late fees, set all electronic payments for weekdays (not weekends or holidays).
- Note your bill paying and contract renegotiation dates in your calendar.
- Keep all of your bills in one easy pile. No need to waste your time with fancy file systems.
- Open Office is free software and excellent for spreadsheets, word processing and more.
- I use gmail and gmail calendar to manage household events and tasks.
~Melissa the Empress of Dirt ♛
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