Bills are part of any budget, and your best policy is to plan how to pay them each month. However, life happens. You may find one day that you have missed a payment or two.
Interest charges and late fees can affect your credit score. Here are seven tips for getting control of your bills.
1. Make a List of All Your Bills
If you auto-pay some of your bills or misplace paper copies, it can be easy to forget what bills you pay each month. Make a master list of all your payments to keep everything in one place. Include their due dates. That way, you can refer to your list each month to ensure you paid everything on time.
Your list can also serve as a budget builder. Review it to see what you are spending monthly.
2. Create a Budget
How much are you spending each month? Looking at the list you created gives you a clear picture. You may find that you have subscriptions you forgot about — cancel them and remove them from your budget.
3. Factor In Your Goals
Now that you have a clear picture of your spending, you can create your own type of bill: funding your goals. Say, for instance, you want to buy a car. Use an auto loan calculator to determine how much you’ll need to save for a down payment. Add a designated amount to a savings account each month and pay it just like your other bills. Once you buy your new car, you’ll have auto payments to make. Those will need to go on your master bill list and factor into your budget.
4. Check Due Dates
Your bills’ due dates might not align with your paychecks. Perhaps some of them are due before you get paid each month, and you are always low on funds. You may have the option of changing your payment dates. Call the companies to see if the dates are flexible. When you set up your auto loan, look at the due dates of your other bills to see when the best time is to schedule your car payment.
5. Ask About Grace Periods
Most companies have a 15-day window before charging a late fee. While it is best not to make a habit of paying bills late every month, a grace period can give you a little breathing room when money is tight. If you discover you use your grace periods every time, see about changing your due date.
6. Set a Regular Bill-Paying Date
Schedule a time each month to sit down and pay your bills. If you make it a habit, it will be easier to remember. Choose a date that allows you to get paper bills in the mail and get everything paid on time.
You can sometimes set up your auto loan or other bills to pay automatically. The company automatically withdraws the funds from your account. Setting up automatic bill payments can save you time. If you choose this method, be sure to reconcile your account regularly. Otherwise, you may get hit with a surprise when the money goes out of your account.
7. Monitor Your Bills
Even if you have auto-pay set up, ensure your car payment and other bills get paid. Check your bank statement for errors and call right away if you see a problem. While mistakes don’t often happen, monitoring your accounts is a good policy.
Making sure your bills get paid monthly is one of those not-so-fun but necessary things people do. It is worth the effort to ensure your car payment and other bills get paid on time, though. You avoid late fees and gain peace of mind.