8 ways to make bill-paying easier

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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!
  7. 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.
  8. 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.

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Maria
Maria

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!

alan
alan

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.

James Kew
James Kew

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… Read more »

prlinkbiz
prlinkbiz

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!

Tanya
Tanya

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… Read more »

Susan
Susan

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… Read more »

J.D.
J.D.

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.

finance girl
finance girl

I’d also add “automatic monthly payment” to the list, for things you are comfortable having that for.

DollarBytes
DollarBytes

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.

Russell Heimlich
Russell Heimlich

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… Read more »

Michael Langford
Michael Langford

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

luneray
luneray

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… Read more »

Russell Heimlich
Russell Heimlich
ladyroo
ladyroo

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.

Grant
Grant

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… Read more »

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