As inflation persists at historic levels and consumers see higher costs for just about everything, it is becoming increasingly easier to fall behind on bill payments. Recent reports on personal finances point out that credit card balances are on the rise—especially for younger consumers under age 25—and that delinquencies are increasing. The challenges of keeping up with rising expenses is cutting into the average consumer’s savings and compelling many people to take on more debt. Proper management of personal finances starts with good habits and a bill-paying routine that can help keep you on track in even the most challenging of economic times. Some steps to take to help organize and systematize the bill paying for better financial management:
Have bills and statements lying around your home or office? Gather them all together and relocate them to a dedicated space. Choose a specific place that you can store bills the moment they arrive in the mail until you have time to open them. If you receive a lot of electronic statements, create a designated folder on your device to store them as well, so that they are all in one place and can be instantly retrieved.
While it may seem tedious or sometimes unnecessary, good personal financial management requires you to know exactly where your money is going and why. Look over each statement carefully to make sure you are being correctly charged for purchases and services and that there are no penalty fees or unauthorized charges. Reviewing your bills for accuracy is a good habit to establish and will alert you not only to any errors in your bills, but also to areas of spending that you may no longer need and can trim or eliminate.
Creating a bill-paying routine greatly reduces your chances of falling behind on payments. Select a day and time each week or every other week that you can devote to managing your bills. While this is not a routine anyone likes or looks forward to, getting ahead of your bills and being less encumbered by debt are goals worth sacrificing a little time for. Chances are your bills all have different due dates, so choose days to pay them that align logically with the due dates to avoid late fees.
A lot of automating tools exist to help people streamline bookkeeping for personal as well as business purposes. Setting up automatic bank payments for your bills saves time, though you still need to regularly review your checking account to make sure you have enough funds to cover regular withdrawals. Having recurring bills charged to a credit card helps consolidate all the payments into a single bill for a more simplified payment. Online accounting services can help keep you get organized as well, and many offer features like advance payment scheduling, due date tracking and reminders, low balance alerts, and updates of balances for partially-paid bills. And while automating epayments can be efficient for certain bills, there are many times when a paper check is the more convenient or secure option. Online check printing simplifies the bill paying process by enabling you to print checks instantly from your computer with no special supplies needed. Checkeeper can also print and mail the checks for you for those times you are away from your desk, are short on time, or lack the printing and mailing supplies.
One clear indication that the bill paying is not optimally managed is that you habitually wait until the last minute to pay bills. While of course it is preferable to keep money in your own account for as long as possible, waiting until the last possible moment to make a payment is risky and can lead to accidentally late payments, and thus, excessive fees. Allowing time for payments to arrive prevents disputes later and reduces the likelihood of late charges. If you make payments over the phone or online, electronic withdrawals to your account may not post immediately. Mailed checks require several days of pre-planning, as they take time to travel through the mail as well as time needed for processing and posting. Checkeeper offers several mailing options so that your bill payments arrive on time, including an overnight mailing option with tracking for those payments that are large or time sensitive.
Many typical household bills are predictable, but unexpected (usually large) bills do come from time to time, and preparation for that helps prevent a personal financial crisis. While many Americans were able to increase their savings during the last two years because of quarantines and reduced entertainment options, shopping, dining, and traveling are now up, making it tempting to abandon that savings habit in favor of higher spending. But having an emergency cash reserve is an essential part of good financial management and is your safety net during unexpected setbacks. Experts typically recommend having at least 3-6 months of living expenses in savings that are reserved just for emergencies.
Getting organized is the first step toward better personal financial management. While it is tempting to put off paying bills for as long as possible, having them loom over you only worsens the dread. Getting a handle on your bills, reviewing them carefully, knowing due dates and outstanding balances, and tracking the payments reduces stress in the long run and creates good financial habits that ultimately lead to greater financial freedom.