My system for never making a late bill payment.

I must admit, for a good portion of my bill paying life, I stunk at keeping track of it all. I would get so frustrated with a company when one day late would cost me more and more money, sometimes even taking my precious deposit money away. One day, I had enough and a new system was born. I have been fine tuning it for years but I must say, no late payments have been made since its implementation.

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What is my secret?
I have to warn you, each step must be performed each month in order to keep your bills in check and timely. Otherwise, things creep up on you. One bill doubles in size and your whole system is thrown for a loop. What is my step by step system?

Tracking each bill
I use an Excel spreadsheet to track all of my bills so I don’t waste time recalculating totals as I try to put together my list of bills.

I keep track of EVERY SINGLE BILL. That measly Netflix bill or a monthly subscription has to be tracked in order to see what you are even working with. Begin by listing all of your bills.

  • Housing
  • Utilities
  • Health insurance
  • Car loans
  • Car insurance
  • Credit card payments
  • Phones
  • Internet
  • Subscriptions
  • Cable/dish/Netflix
  • Student loans
  • Memberships
  • Monthly medical payments
  • Anything else that is a monthly bill

These are your non-negotiable payments. They expect payment each and every month, no exceptions.

Next, list beside them, their due dates and due amounts. Try to put them in order from earliest due date to latest in the month. This will give you a rough idea of what payments should be made first. If you are behind on your bills, start another column for back payments that need to be made. You must pay this off before you can start making “on time” payments. It is still considered late if you are always trying to catch up.

Do a final tally on what your bills are costing you each month. This number may surprise you and that brings us to the next point.

Analyze each bill
Here is one of the harder parts that takes some real motivation to do. That is, cutting bills where you need to in order to make ends meet. If you can’t live off of what is left over after paying your monthly bills, cuts must be made to get on track.

You have two choices. You can cut or decrease services or you can call and negotiate.

Many times you can get an introductory rate on things like internet and phones. You may even want to switch services to a more reasonably priced company. Some companies will even drop their rate to match the competition so you can keep your current service. Take the time, make the calls.

If you decide you need to cut services to make ends meet, look at non-essentials first. This would be memberships and subscriptions. You might also be surprised how many memberships you are paying for monthly that you never use. Like that gym membership that hasn’t been used since the beginning of the year.

If drastic measures must be taken to get things back in alignment, find options that are going to give you the most bang for your buck. Maybe it is disconnecting your landline, going without internet and a smart phone. Whatever the situation, these changes must be made to get on track.

Pay your bills first
I never spend out of my bank account before figuring out what bills must be paid. My bills take priority and I can easily go down the line and pay my bills biweekly with my online bill pay account. My bills are handled by my bank so I have records and confirmation numbers that things have been paid. Plus, it takes me 5 minutes total to put in my payment amounts for each bill and hit “pay now”.

Once I have decided what bills need to be paid, I total up what they will cost. I keep that number with me so when I want to check my bank account, I can easily subtract that total from the amount in the account. That way, I am never confused on how much spending money I actually have and avoid the headache of overdraft fees.

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The bill pay puzzle
I like to think of my bills as a fun little puzzle. Biweekly, I decide what bills I can pay with my latest paycheck. These are planned in advance so I can save a portion of each paycheck for making payments. Then, I pay what bills are due first until I run out of bill money. If I have any money left over, I will either pay a small bill that is due at the end of the month or put that money aside for the next time I need to pay bills.

This is usually a puzzle for me because my husband receives irregular paychecks. Some weeks I have to make sure I have enough living money to take it two weeks and sometimes I can go ahead and wipe out multiple bills at once. I can usually pay my bills weeks ahead by being creative with how I spend my money.

I plan ahead
This is so crucial! I like to plan my bill pay money 2 months at a time so I can plan ahead and stay on track. Sometimes what is going on the next month would leave you broke and push your bills back until they are late again. This doesn’t happen when you foresee what is going to happen and set money aside to combat what the next month will bring.

For instance, since my husband is self employed he is not paid for vacation days or holidays. I make sure to take this in to account when estimating how much money I will have available the next month. I stay aware and the missed money is not a big deal because I took the opportunity to plan ahead.

Tax refund season
For those who receive a refund each year, do not miss out on this opportunity! Pay off any overdue bills, wipe out any credit card debt or loans. This will take the burden of bill pay down tremendously and you will thank me later! Each year, we choose to pay off something or if we have no debts, we save the money for something we really need or to save for a rainy day.

By starting to pay off some debts, you can open up the opportunity to save more money and give your family even more financial security. Bill pay doesn’t have to be overwhelming each month. Work to get ahead and things will begin to get easier.

My secret revealed
So what was my big secret? Being aware. Staying current and on top of your bills. Burying your head in the sand will not keep life from happening. So start digging in to your finances so you can see the opportunities more than you feel the challenges.

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