Managing Your Monthly Bills
Posted by Gail | Filed under Money Management
I’m always amazed by people. I was having lunch with an acquaintance (she hasn’t seen me in my undies yet, so she hasn’t made it to “friend”). She was telling me all about how she stresses out every month when it comes time to pay the bills. Here’s a woman who manages a household with heaps of kids, in her early forties (so she’s been a grown-up for a while), and she’s cowed by the prospect of bill payment. Wow!
I get the sense that there are more than a few people who freak out over the bill-paying process. I’ve listened to people talk about a tightening in their stomachs, the sense of dread in case there’s not enough money. It’s like a monthly ritual of torture. Some people are so afraid of their bills that they just toss ‘em in a drawer without opening them. There’s a plan! If you’re stressing out over managing the monthlies, you should take a deep breath and:
1. Set-up a folder into which you put all your bills every month. Actually, two folders work better. One dated the 1st to the 15th, the second dated the 16th to the 31st. When you get a bill, open it and put it in the right folder based on the due date. Now you have everything in one place so you don’t have to go hunting for the bills you shoved out of sight. Be brave, this is the first step in taking control.
2. Set two dates a month for bill payment and money management: the 10th and the 25th work great. That’s when you’ll pay your bills. See, no more procrastinating because you have a date set! You need to make sure you’re paying your bills at least three days in advance of their due date so you don’t get hit with a late fee because of the time it takes to “process” your transaction.
If you are paying your bills manually, for each bill, look at the balance on the current statement to verify that last month’s payment was credited to your account. If you’re paying by cheque, write your account number on the face of the cheque to ensure that your payment will be properly credited.
Enter the cheque number and the payment amount into your Spending Journal. If you paid online, enter the amount paid and the confirmation number in your Spending Journal.
Write the payment amount, the cheque number or online confirmation number and the date on the face of the bill or statement. Put it into your “Paid” folder.
3. Automate as much of your bill paying as you can. Many of my bills come as e-bills. Many more are auto deductions from my account. Each month, at the beginning of the month, I subtract those amounts from my spending journal so the money’s already “gone” and I can’t spend it on other stuff. (Since I’m paid monthly, this works for me. If you’re paid more often, you should read this blog.
4. Set-up online banking so you can pay and record info immediately. I know there are some die-hard pay-by-mail fans out there. If it’s working for you, swell. But if you’re having trouble keeping abreast of what’s been paid and what hasn’t, nothing beats online banking.
5. Eliminate unnecessary bills. Are you still paying for that subscription you took out five years ago? How about that annual gym membership that you keep forgetting to cancel? Are you spending your money on things you actually want, or are you just defaulting to spending because taking action seems like too much effort? Hey, cut that out! You work hard for your money and even small amounts drifting away through apathy is dumb!
One of the most popular tools I’ve given my families on TDDUP is the Office In A Box. I’ve given these away at a couple of speaking engagements too, and people have cried with happiness. It’s not the stuff in the box per se. I think it is more the relief that they now have a system and they are so frickin’ relieved.