Are you one of those people who only remember to pay the power bill when the lights go out? Sometimes it seems that our lives are run by demands from others and when it comes to paying bills, this is certainly true. If you’re worried about staying on top of your bill repayments, consider the five strategies below.
Know Your Bills
The first step is to look into your living costs. Work out all your essential expenses by month. This would include things like rent or mortgage repayments, power, water, any rates and levies. It should also cover phone bills (mobile and landline) and internet, as well as essential transport costs (fuel to get to school or work, or public transport ticket costs). Also look over your last few months’ grocery bills and come up with a monthly average for your food expenses. This gives you an idea of your household running costs. If you then realise that you are struggling to meet your payments, it may be a case of calling a debt consolidation company to assist with your finances.
The 2 Month Reservation
Now that you know how much your basic monthly expenses are, double the total amount. Aim to keep two months’ of living expenses in reserve. This way you are always around two months’ ahead. You may have to start a savings plan to work up to your reserve amount but it will be worth it. If it helps you keep on top of things, redefine low balance. Instead of low meaning you have little or no funds on which to draw, tell yourself (and your household) that low now means your everyday account has dipped below your two month reserve.
Coordinate To Automate
If you find you often miss bill payment dates, automate as many of your essential bills as you can. Spend some time working out the due dates of your regular bills, and mark these on a calendar. Now use a different colour and mark when your money comes into your account. Automate those payments that fall due after your monies hit your account and see if you can get the other payment dates moved. Most suppliers are happy to alter payment dates if it means prompt settlement of invoices. With some careful planning you can ensure your bills are paid on time which not only saves any late payment fees but also helps you sleep better at night knowing your basics are covered each month.
If you don’t already have some kind of system for your bill payments and associated paperwork, it’s worth investing some time to create one. It doesn’t need to be anything dramatic; simply filing of bills due and bills paid, with receipts and payment details indicated clearly for each transaction. Many people rely on their bank statements for this kind of information but combing through pages of statements to find proof you’ve paid a bill is frustrating and time consuming. Some companies do not appear on statements under their trading name either which can make their transactions with you almost impossible to track, even in this age of electronic data manipulation. Don’t risk it; at the very least, a series of files and a binder could be all you’ll need – and some colourful sticky labels. It might even be fun.
Tracking Those Bills
It’s a good idea to review your bill repayments regularly; perhaps monthly or quarterly. Automating bill repayments keeps you on top of paying providers on time, but it also means you may not be alert to incremental increases in charges or slight decreases in services. For example, if you pay your car insurance by direct debit and the premium rises by a dollar a month, you may not notice. You will of course have been advised but who spends hours reading every piece of mail from their insurance company? Staying abreast of your repayments also means making sure you’re still happy with the deal you’re getting.
Believe it or not, staying ahead of your bill repayments is actually possible. It does require a little forward planning and a system but once the basics are in place, it is quite easily done.
What’s the latest you’ve ever paid a bill? Let us know in the comments box below.