Here’s a tip that can pay big dividends: Pay your bills as they arrive. This helps financially and psychologically.

I get paid twice a month. Because I used to live paycheck-to-paycheck, I paid my bills twice a month, too. Although I now have a buffer of savings, it’s only recently that I’ve discovered the advantages of paying my bills as they come in rather than waiting until they’re due:

  • It saves time. Rather than spend half-an-hour batch-processing bills, I can take a few minutes at a time to pay just one bill.
  • It saves worry. I’m no longer concerned with late payments. I know my bills are mailed on time.
  • It saves mistakes. Sometimes I would forget to pay a bill. If I pay the bills as they arrive, this can’t happen.
  • Most of all, it saves money. When I got paid, I used to buy my fun stuff first, and pay bills out of what was left over. Now that I pay bills first, I’m more inclined to invest any remaining money instead of spend it.

Even if you live paycheck-to-paycheck, you can profit from this advice. Try it for a month. You may not be able to pay all of your bills this way (your mortgage, for example, might have to wait), but you should be able to pay most of them. See if it doesn’t take a load off your mind!

The next step is to automate billpaying completely, as suggested by David Bach in The Automatic Millionaire. That’s a project for July.

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