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Guest Authored By Alicia Rockmore and Sarah Welch.
Here’s a scenario: you come home from work to find a “past due” cable bill in the mailbox. You could have sworn that you had paid it two weeks ago, but your checkbook says otherwise. Still hoping you just forgot to enter the payment in your checkbook register, you rummage around your kitchen, home office, purse … and everywhere else you have little piles of mail stashed. Sure enough, you find the original bill, unopened, under a pile of clutter. Sound familiar? You are not alone. Many people who have problems paying bills on time aren’t necessarily cash strapped, but rather, just need to get more organized financially. We’ve got a few tips to make the dreaded chore easier for you that will save you hours and stress wrinkles.
Alicia on “Why it’s crucial”
“Late payments can harm your credit score, and ultimately make you appear riskier than you might otherwise to lenders and even auto insurers. That can cost you money, or worse, compromise your ability to get a loan when you really need one. Worse, many credit card companies have instituted severe rate hikes – often to levels above 30% APR – for customers who have missed a payment on any of their accounts. Not that credit card companies are making it easier to pay on time. In addition to strict hour deadlines, bills are now mailed closer to the due date, leaving customers with one week less to submit payment than a decade ago. So you must be vigilant.”
Sarah on “Establishing a bill routine”
Paying bills may be the last thing you feel like doing after a busy day. However, without a routine for organizing your bills, it’s just too easy to miss payments. Your routine doesn’t have to be complicated. In fact, you only need to establish a designated day and time each week to pay bills. Pick a spot where you feel comfortable and make it your permanent bill paying perch. I pay my bills every Monday evening while sitting at the kitchen table. On that night I get a “free pass” from the dishes so it’s easier to get over my tendency to procrastinate. I like the kitchen table because I still get to interact with my family – I’m not locked away in another room, suffering through the chore.
Once you have picked a day and time for bill paying, follow these simple steps for organizing the process:
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Go Electronic
Computers can practically do everything for us these days, including bill paying. You can automatically pay bills every month by setting up electronic bill paying with your bank. All you have to do is enter in the information of who to pay and when, and with a quick confirmation your bank will write a check and deduct money from your account every month. This is so simple that in 2005, 24% of bills were paid electronically. So jump on the bandwagon and you will never have a late bill again!
a friend
. Now, you must separate your expenses into fixed and variable expenses. Fixed expenses stay relatively the same from month to month (such as a mortgage or car payment). This does not mean that these expenses are off-limits for possible reduction, such as switching cable providers or refinancing a mortgage. However, the variable expenses do change from month to month. Thus, this category provides an excellent opportunity for “cutting back.”
