Have you ever been in a situation when you postponed the payment of a bill and you forgot about it, only to get a second notice with the same bill and late charges added? I’ve been there, and I’m sure there are many others who have experienced the same. I can say that most late-fees occur for that same reason. For this not to happen again, it requires wisdom to have a system in place by which bill will be paid on time, so as to avoid unnecessary late fees. 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%.
So what do you do?
Organize the Process in a Group
Anyone who has ever forgotten to get something from the grocery store realizes that it requires a lot less time to buy everything one day than having to go get something as you need it. It requires a grocery list and a bit of foresight, but it saves you hours throughout the week by NOT having to go back to pick up missed items. Why not implement the same type of planning to the paying of your bills?
Rather than sporadically paying them as they come in, or checking a pile on your desk every few days, you should be able to designate 2 days a month to pay your bills. And of course, if you want to save even more time use your bank’s online bill pay.
Steps to Manage your Bills
Itemize your bills. You want to make a list of all your bills, the due dates, the average monthly amount. Like a grocery list principle, this helps you see where you are, and what efforts you have to put in to be on track
Group them into payment periods. Most companies send out bills around the same period. Either they are generated 2 weeks before the end of the month or the first 2 weeks at the beginning of the month. You want to call the companies and have them generate all your bills on 2 days. Typically you get paid bi monthly, so it will help if the bills all came in around your pay period.
Figure out the bill amount per pay period. When you do this, you have a better picture of where you are financially, and what commitment you need to pay your bills. A a practice round up the figures. Say you get a bill for $34.82, write it down as $35. Psychologically this helps you because you know you’re going to pay your bills for that period all at once, it is a whole number, rather than staggered payments all through the month. You do it once, and you wait to the next pay period. So you know what you have left can be properly allocated
Setup Automatic deductions. After grouping the bills, you know the total amount. Set up a bill pay bank account where all the bills for a particular period will be deducted. Try to set this up to deduct automatically 3 days after your pay-day. This way you have enough time for your pay check to clear if it is direct deposit. Add 2 more days if you are paying the check in physically.