The Scenario
You receive your latest credit card statement and again a late fee of $35 has been tacked on. You panic realizing that you’ve again missed the due date! Why, oh why, can’t you just pay them on time? Not only are the late charges making your balance constant, they are also charging you interest on the total balance due; meaning you’re paying interest on your late fees. What a waste of money!
The Problem
Juggling bills is much more difficult if you aren’t organized. If mail is dumped on a counter top or desk and only sorted through once a month, the possibility of missing a payment is pretty high. Many times, those who are unorganized begin to make a habit of this behavior. Sorting through the mail becomes an agonizing task, often resulting in cold sweats and panic attacks. Analyze your problem and label it:
- You’re unorganized. You don’t have one place you place your important bills and paperwork. Instead, you throw it in a pile somewhere to look at later. But later comes too late.
- There’s no routine in your daily life, let alone your bill paying one. If you constantly feel like a chicken with its head cut off, something needs to change. Often that change boils down to routine.
- You frequently don’t have the money available to pay your bills on time. Since you’re not quite sure how much money you have in your account from one moment to the next, when the bills are due, there’s not enough money to cover them.
The Solution
Instead of harping on the problem, label it and find a solution. Working from your strengths, figure out what will work best for you. Most people do well with finding ways to organize their bills and their time. Set a routine and stick to it. Go through your bills and find when most of them are due. For instance, many bills are due around the 1st and the 15th of every month. Here are a few more tips to solving specific problems:
- Get organized. Set aside a basket for bills. Open them right away and circle or highlight the amount due and the due date.
- Stick to a routine. Once you’ve figured out when most of your bills are due, schedule to pay them two days a month. Set aside half an hour to an hour when it’s quiet around the house and you can focus on writing checks, paying them online, or setting up auto-debit and recording the payments in your checkbook register (it’s best to do this with an online program in my opinion.)
- Set a budget. This might be your first step; figure out your expenses and income. Set aside some money for upcoming bills and savings. This way you won’t end up short when the due date arrives.
Late payments can be remedied by staying on top of your finances. The more organized you are with your payments, the more relieved you will feel when the bills arrive.
Do you automate your finances? Are you organized?
8 Comments
We pay all of our credit cards (really, just three, one cashback card each for my wife and I plus our Kohls card) on the first of the month. I would suggest tying the dates to other important financial dates (mortgage or rent, payday, etc.) and you won’t easily forget.
I love online banking! I started using it because I wanted to schedule paying bills because we were going away for three weeks. That was close to 5 years ago. I set up the payment for the invoice as soon as I receive the bill. That way I won’t forget to pay it. I record it in my check book when it hits the checking account. If money is tight, tie the payments to particular paychecks. Using online banking, you can set up automatic payments very easily.
I actually wrote an article awhile back about the dangers of automating your finances. Dont get me wrong, for the financially responsible automating SOME of your finances can be great… but often times people are paying their bills late simply because they dont have the money…in which case they need a different variety of advice.
@Money Beagle
I totally agree with selecting payment dates that are easy to remember, like the 1st and 15th or payments that correspond to pay day.
@krantcents
I like doing that too; setting up payments weeks in advance. Since I only get paid once a month, budgeting and paying bills isn’t too terribly complicated. But it does take some planning, making sure all bills are covered weeks after payday comes and goes. 😉
@Justin @ MoneyIsTheRoot
You’re right. Most people need to create a budget first; organize their income and expenses to see if they are spending more than they make. Then, setting up automatic payments on most bills would work for most people. A cash-only system for non-necessity items is probably another good way to make sure a person isn’t over spending. thanks for sharing your advice!
I’ve got a budget that runs like clockwork. Each check has bills with due dates already ready to go. It’s the only way I can keep up with everything because I’m pretty absentminded.
@LaTisha – That’s a great tip; writing out the check as soon as you get the bill with the due date. Thanks for sharing!