Refine Your Bill Paying Process: I can’t pay your bills for you, sorry about that. But I can help you pay your own bills better, saving time and money on late fees, and decreasing stress. Here are 7 tips, and a case study for you to think about.
1. Have one and only one place to stash Bills To Pay: Where do the bills and mail tend to land? Dining room table? Kitchen counter? Hall table by the door? Everywhere?!?!
• Decide on one and only one place to put your Bills To Pay.
• Make it convenient, well-marked and attractive, if it is going to sit on a counter or table top.
• Make sure the bill-payers/mail-openers know where the One Place is, and that they use it every day to tuck in those Bills To Pay.
• When it comes time to pay the bills, it is a simple matter of grabbing them all and paying them, instead of searching the house for them or losing them!
2. Be Proactive: Have a list of all the bills you pay, every month and irregular ones, too, like insurance or tuition. If you have not received one when it comes due, call your vendor and request it. There have been months when we’ve not received certain bills in the mail, and if we had not called about them and made the monthly payment, we would have been charged a late fee.
3. Electrify your Bill Paying: There are two ways to set up your Bill-payments online:
• One, set up your payments with your vendors (like Nicor, ComEd, Kohl’s, etc.), to take the payment from your account. Or
• Two, Set up with your on-line banking to pay the bill. You set the amount and the date of payment, then the bank sends the money.
• I prefer the second way, for a couple of reasons: It seems safer for your bank to send the money instead of all these vendors being able to request money from your accounts; and if you change banks or account numbers, you only have to re-set your on-line banking information, instead of contacting each vendor with the new information.
4. Spread out your Payments: Sometimes it seems that everything comes due at the same time! In our household, we get paid twice a month, so we prefer to have half of our bills due at the beginning of the month, and half in the middle. You can contact your vendors and request a billing cycle change, to help you budget more wisely. Some due dates cannot be changed, but some can, all you have to do is ask!
5. Put Bill Payment Day on your calendar:
• Make an appointment every week or every pay period to pay your bills.
• Perhaps it is every Tuesday evening, or the 1st and 15th of every month. Whatever works for you. Just put the appointment on the calendar, and make sure to do it!
• Don’t Re-act to bills. Don’t pull out your check book, stamps and calculator every time a bill shows up. Once a week is often enough, you want to pay your bills more efficiently, not more often!
6. An easier way to file your Paid Bills:
• Filing is for retrieval, not for long-term storage. We keep paid bills for a predetermined time (let’s say 2 years) for “Just In Case”. Just in case we need to answer a question, return an item, or call for service. And that’s just fine.
• However, we can simplify the filing process by filing our bills by month.
• For regular monthly bills, set up 12 envelopes, file folders or pockets in a binder, one for each month. Name each month for 2011 “Month name – odd year”, and stash your paid bill stubs and receipts in this file. Set up a second set for, you guessed it, “Month name – even year”.
• At the beginning of 2012, start filling the Even Year envelopes or binder. At the end of 2012, go back to the Odd year envelopes or binders, shred the contents (by then, up to 2 years old) and start fresh for 2013.
• Yes, you really do have to file. But, when “filing” is simply putting everything in one folder and (probably) ignoring it for 12-24 months until your system reminds you to purge it, that sounds pretty easy to me!
7. Monitor your credit rating. Illinois residents are entitled to a free credit report every year from each of the three credit reporting agencies. Request yours every year, and make sure there are no mistakes, unresolved issues or mysterious entries. The three credit agencies are Equifax; Transunion; and Experian.
Case Study: A friend mentioned that she wanted to improve on her bill paying process. She pays her bills online, and stores her paid bills near her computer. Her Bills To Pay are on her dining room table, rooms away from the computer. Sound familiar? Sure, because lots of families use similar systems, and actually it is a good system. Having the bill payment and the paid bill storage together is a great idea, so that works. Having the bills on the dining room table may be the sticking point, though. Like any system, paper management requires us to create and stick to some good habits. So to solve that problem, she (and we) could try:
• Creating an attractive basket or handy envelope to collect the Bills To Pay (and nothing else!) near her mail-processing place, for her and her husband to stash all unpaid bills.
• This friend also mentioned episodic bills, not just regular monthly bills, like activity registrations, etc., and to help with that, perhaps she chooses the “once a week” bill payment schedule, for those things that come up between paydays.