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8 Ways to Make Bill-Paying Easier Print
Friday, 29th September 2006 (by J.D.)This article is about Basics, Hints and Tips
My friend Mike is well-off. He lives alone, makes a good salary, invests wisely, and doesn’t spend money on foolish endeavors. Yet he often gets charged late fees. Why? Because he’s disorganized. He brings his bills home, throws them on the table, and they get lost under a mass of paper during the weeks that follow. When he remembers his bills, he pays the late fees, and sends extra money to cover the next few months. He knows he’ll forget again.
Here are some tips to make bill-paying easier:
- Process mail right away. Don’t even set it down. Open each piece of mail and process it: recycle the junk mail, shred the credit card offers, make a stack of magazines, and pay the bills.
- If you can’t process mail right away, have a designated place for bills. Use it. I tuck mine in a cubbyhole at my computer desk. Sometimes I forget to put a bill in the cubbyhole. This is Bad News. If it’s not in the cubbyhole, a bill is lost. Then, like my friend Mike, I get a late fee. Don’t be like Mike.
- Pay your bills as they arrive. It’s unrealistic to expect people to pay bills the moment they walk in the door. But it’s certainly possible to pay a bill on the day it arrives, or soon after.
- At a minimum, process your finances once each week. Designate a time — Sunday night before bed, maybe — to balance your checkbook, to check your bank statements, and to pay your bills.
- Prepay your bills. Pay for two or three months instead of one. My friend Mike does this because he’s forgetful. I do this at the end of every year: I get a large Christmas bonus, so I pay for three months on each bill.
- Pay your bills online. Nearly every major utility and bank now offers the ability to pay your bills via the web. Some even offer small discounts for using this service!
- Reduce the number of bills your receive. Cancel services and subscriptions you no longer use or value. Set up automatic payments. Consolidate services where possible.
- Save money by asking for a lower rate. Again and again, people have told me how they’ve been able to save simply by calling and asking for a better deal.
Paying your bills doesn’t have to be a chore. When I pay my bills as they arrive, it’s actually kind of fun. And the best feeling of all comes when I pay off a debt and know that I’ll never see that bill ever again.
September 29th, 2006 at 11:34 am
I agree with all of these but my budgeting system allows me to pay my bills once a month and at the beginnign of each month. Because I am working with last month’s income, there’s no juggling of paydays and bills. It has sure saved me alot of time!
September 29th, 2006 at 11:54 am
I would disagree with any advice suggesting you pay as soon as you get bills or to prepay. That’s money that could be earning interest in an account. I always wait ’til the last minute. Sure it’s just pennies, but they add up over time.
September 29th, 2006 at 12:47 pm
I agree with Alan — why hand them money early that could be working for me instead? The rational strategy to maximize my return is to pay just before the due date.
But I don’t think that’s really what J.D.’s getting at here. His point is that if you’re disorganized, you need a plan that’ll work for you. Better to forego 5c of interest than to forget to pay on time and get hit with a $15 late fee.
FWIW, I find Microsoft Money’s bill calendar very useful for handling bills — I have estimated payments set up for each bill, update them with the exact total and due date as the bills arrive, and then either write checks or make online payments as the bills come due. This does require me to actually check Money for any bills coming due, but as I typically enter my receipts into it every few days anyway this isn’t a problem.
September 29th, 2006 at 1:29 pm
I love online bill pay! It’s so easy! The mail system hates me- my bills and checks were always getting lost- (I just discovered an “outside vendor” had changed my cell phone biling address, causing bill trouble!) Yeah- I am a fan of online banking!
September 29th, 2006 at 1:47 pm
I agree with prkinkbiz.
Online bill pay has saved me the hassle of worrying about my regular bills with its recurring payment feature. My bank even sends me a notice the month before the end of a recurring payment cycle.
It saves money in stamps and checks. I haven’t reordered checks in two years, since I moved into my house.
The best part is I have control of when all amounts are paid and don’t have to worry when my credit card is expired or if it is stolen. I feel so much safer dealing with bills through my bank rather than my debit or credit cards.
September 29th, 2006 at 3:13 pm
I like paying my bills online–mostly through my bank, for my cell phone and credit card through their websites–because, to be honest, it saves me the price of a stamp and I’m stingy like that. (Actually, I just never have stamps for any other reason, and it’s such a hassle to go get them.)
I don’t really agree with prepaying because I think it’s important to actually look at your usage on each bill before you pay it, and if you’re carrying a balance that might not happen. It could be much harder to get your money back if there’s something you don’t agree with.
September 29th, 2006 at 3:41 pm
For the record, I’m not a huge fan of prepaying either, but I think it’s a good tool for some people, like my friend Mike. (Who is a real person, by the way.) It was also good for the old non-frugal J.D.: if I didn’t prepay my bills with my Christmas bonus, I was likely to spend the money on something else. By spending the money where it had to be spent, I prevented further foolishness. It’s not a necessary step anymore, I’m glad to say.
September 29th, 2006 at 5:54 pm
I’d also add “automatic monthly payment” to the list, for things you are comfortable having that for.
September 29th, 2006 at 6:06 pm
Good intentions, but dealing with actual paper bills and checks is a waste of energy. Why not just sign up for electronic billing and pay them electronically?
I can’t remember the last time I wrote a check for personal bills.
September 29th, 2006 at 8:18 pm
My life is pretty simple right now and there are only two bills to pay, rent and credit card. I found the easiest thing to do is use Google calendar to organize everything, and have a seperate calendar for just bills. I make it red to stand out and make the event last all day to add emphasis. You can also set a reminder when you create the event to email you so you won’t forget. If you have bills that are always due on the same time (like the 5th of the month) Google Calendar is great for stuff like this. If you need an invite just send me an email. My gmail name is kingkool68 (hope you can figure out my email from that).
September 30th, 2006 at 10:13 am
[...] here’s a good post from get rich slowly… some practical advice that i should put into place. [...]
September 30th, 2006 at 3:53 pm
Sign up for a free, online bill pay service that uses YODLEE.
I have access to it via Wachovia bank online. This will allow you to schedule regular payments on all my bills.
I have setup a secondary checking account that automatically gets the correct amount transferred into it at the start of every month. Then, the automated bills are written out of that account, and I don’t have to check anything.
I can set alerts to let me know if the amount of the bill is greater than I expect.
–Michael
September 30th, 2006 at 9:45 pm
I have set up a savings account at my credit union that is used just for paying bills. The problem is that not all companies will do an automatic bill pay from a savings account, so those I pay by check (the old fashioned way).
I was always misplacing bills, too. I set up a special tray next to the phone, or on my desk or…but nothing really worked because these are actually kind of out of the way places. One day I realized that I look at my kitchen calender several times a week, so I clip the bills to that. I get paid 2x a month, so bills that get paid from the first pay check are clipped to the top sheet and the others are clipped to the bottom. This has worked really well for me.
October 2nd, 2006 at 11:06 am
Maybe this can help? -> http://www.downloadsquad.com/2006/10/02/keep-track-of-bills-with-billq/
April 18th, 2007 at 3:44 pm
[...] 8 Ways to Make Bill-Paying Easier [...]
June 19th, 2008 at 8:15 am
I used to be fully automated - most bills were paid automatically from my credit union checking, all the statements came electronically and I could monitor it all daily online. No muss, no fuss. Then my computer died. By the time I got it repaired, I was in a panic. Now I pay bills online as they arrive but NOT automatically, and I get paper statements so I know what is due and when, and can check for errors.
December 3rd, 2008 at 7:05 pm
I use a service called PayTrust (www.paytrust.com). With PayTrust you change your billing address to be a personalized PO Box they set up for you. They then open your bills, scan them, and then send you an email to let you know the new bill is available. They even let you know if they expected to receive a bill and it has not come in yet. I have been using this service since 1998 and have had absolutely NO problems since day 1 when I started with them. Using PayTrust I do not have to worry about where I put my bills they are always accessible on the Internet. I travel a lot with my job and having the freedom, and ability, to pay my bills no matter where I am is a wonderful feeling. Another cool feature is that you can see every payment/bill processed by PayTrust — so if you want to compare this years electric bill to last years, no problem.
Last year Intuit bought PayTrust and the company behind the PayTrust is Metavant which processes most e-bills and bill payment services — so why not have the same services but also get the added bonus of not having to receive any bills at home.
The service costs $12.95/month for 30 bills — they pay most of the bills electronically but if needed they write checks just like you would — so you know the bill is paid when the check clears your account. I think the only items they do this for me is with my dentist and doctor…everything else is paid electronically.
I know I sound like a sales person for PayTrust but I truly love and enjoy this service, and trust the company, enough to post the merits of their system. I would highly suggest at least checking out what they have to offer and if it might be something that you could use to help you accomplish your goals and help you remain organized when it comes to paying and managing your monthly bills.