Juggling an average of four credit cards plus utility bills, department store bills, rent or mortgage, insurance premiums, etc can be a real pain in the arse. If you’re typical you’ve probably had at least one late payment because your forgot a due date and got hit with a $25 late fee.
When you go to apply for new credit – especially if you need a new mortgage – you’ll probably get quizzed about that late payment, which was not only costly but is now embarrassing.
According to Mint.com during the first half of 2016 nearly one in five of their users missed their credit card payments. What makes things really strange is that there was enough money in their accounts to pay their bills. The culprit?
They simply forgot.
According to a 2014 study done by Pew Research 55% of all Americans are living paycheck to paycheck. When you couple this with forgetfulness, disorganization and not having sufficient funds in their accounts it becomes easier to understand why people have problems managing their bills.
Fortunately, there are some fairly easy things you could do to better manage your bills and here are four of them.
1. Link your bill payments to your credit card. One really great strategy for managing bill payments is to pay every one you can – from that health club membership to the aforementioned Netflix subscription – with a credit card. The charges for those bills will come through at multiple times throughout the month but they all land on that credit card. This then becomes the equivalent of a centralized payment center. You’ll then need to arrange to have funds automatically withdrawn from your checking account on the 25th or whatever date you need to set to cover your month’s balance.
What this means into is that no cash actually leaves your bank account until the end of the month when it’s time to pay up.
This strategy works best if most or many of your bills can be paid with a credit card and if you know you will have enough money in your checking account towards the end of the month to cover all those payments.
2. Make payments throughout the month. The idea of paying all your bills through a credit card towards the end of the month could make you more than a bit nervous. After all, you may not be certain that there will be enough money in your bank account to cover all those monthly bill payments every month. And getting hit with an insufficient funds charge could really mess up your finances.
Another strategy you could use for better managing your monthly bill payments – albeit one that would be more complicated and would require more time – is to pay your bills throughout the month.
To do this you will need a web calendar you can trust where you can set the dates your bills are due. You should also try to get one that will let you create alerts so that you will always be reminded when you have bills coming due.
Google Calendar will not only let you do all this, it will also let you to share the due dates of your bills with others – if there is a reason to do this.
Could you pay some of your bills electronically? Then create an alert a day or two before their due dates. If some of your bills require snail mail you will need to set a reminder alert for at least a week before their due dates.
You might choose this strategy if you don’t want to risk the possibility of running short of money at the end of the month when you would need to pay all your bills at once.
This would also be a good strategy as it will give a real sense of how much cash you have left after you pay each bill to prevent overspending on other things.
3. Sign up for or use Mint. If you haven’t already signed up for this free app, you should do so immediately. Mint will not only automatically track your spending for you, it will help you create a budget and even send you an alert if you overspend in any of your budget categories.
But now Mint has a new and powerful feature – bill tracking and bill pay.
It will allow you to connect not just your credit card bills but your utility bills and rent or mortgage payments and even any off-line payments to your Mint account. It will then remind you of bills that are due and when they’re due. In fact, it will not only tell when a bill is due, it will alert you as to the minimum payment required (if it’s a credit card bill) and help you schedule the payment.
Using Mint to track and make you monthly bill payments works best if you feel you need to get organized because your billing system is kind of chaotic and you think it would be great to have someone else remember your bill payments for you. It’s also good if you want to pay from your checking account as this would be free.
4. Nearly 25% of all Americans are not totally sold on the idea of mobile payments. Again, according to this study, 64% of those that are skeptical about mobile payments reported that security and privacy were their number one concern.
If you’re a member of that one in four, like doing things the old way or just have a lot of bills you can’t pay electronically than using snail mail for you monthly bill payments is for you.
Of course, it’s important that you leave a lot of time to get a check in the mail prior to when the bill is due. It’s wise to watch your bank account to ensure that the payment goes through. If you check your account and see that a payment hasn’t yet been collected and it’s getting close to its due date you should follow up with the vendor so you don’t get slammed with a late fee.
It’s always possible that your check could get lost in the mail. If this happens, you can probably pay over the telephone at the last minute and avoid those nasty late charges.
This strategy is best if you just don’t want to automate and if you have enough time every week to review your bills as they arrive in the mail or online so that you can send a payment promptly. You also need to be good with follow-up and don’t mind checking your bank statement frequently to verify when and if your bill payments got cleared.