This blog post is the second of two by guest blogger and financial planner and consultant Dr. Joel Lang. (Dr. Lang can be contacted at: langfinancial@verizon.net)
The first post on fool-proof bill paying addressed creating a usable workspace and then gathering the necessary tools for bill paying. This post will address, once that is done, how to easily pay your bills on time. While developing new habits can be challenging (dealing with money can be as well!), over time the consistent and efficient management of money will relieve stress and give you more power and control in your life. Your self-esteem can also improve when you know that you are competently and thoroughly in charge of your financial life!
Here’s how to get started. Once your workplace is set-up and your supplies are gathered, several habits will facilitate success in regularly paying bills on time:
- Managing your mail.
- Paying the bills!
You may be able to implement these routines on your own, or you may find it useful to work with a coach on putting them into place and then designing approaches for maintaining the new habits once you develop them.
MANAGING YOUR MAIL
Managing mail is best if it is a daily process, involving six simple steps. Here’s how to do it:
1. When you get home from work, or otherwise bring the mail in, place all the mail in a neat pile on your designated workspace.
2. Set aside a time each evening (or other routine, convenient time each day) to sit down and open your mail. Do this consistently every day. Important: do not allow mail to accumulate!
3. First, go through the mail and throw out any junk mail you don’t need. That will generally leave you with only a few envelopes.
4. After opening each piece, throw away the envelope. This is actually very important. (Envelopes are often used as a filing system, but as a system they are messy, take up too much space and are terribly inefficient.) Exception: paperclip any return envelope to a bill if you intend to use that envelope for the payment.
5. Review all bills for accuracy, and use a highlighter to emphasize the amountdue and the date due. Then place each bill in the appropriate section of the previously obtained 4-divider accordion folder, based on when you plan to pay that bill.
6. Any correspondence you receive regularly from a particular person or company can be placed in a manila folder marked for that person or company. If a response is necessary, and you are not going to respond immediately, place the correspondence in the 4-divider accordion folder previously acquired, in the next section for bills to be paid, and respond when you pay those bills. Correspondence you need to keep from a company or organization that you rarely deal with can be filed alphabetically in the “A to Z” alphabetized accordion folder previously acquired, along with paid bills.
PAYING BILLS
Paying bills is best done weekly (four times a month). Here’s how to make the process easy:
1. Each week, on the days or dates you have designated for bills to be paid, allow yourself extra time after you go through the mail to actually pay bills.
2. Now that all the envelopes are gone, you can easily identify the bills to be paid any week by simply retrieving them from the appropriate section of the 4-divider accordion folder.
3. Whether you write a check or pay bills online, write the date the bill was paid (and the check number if applicable) directly on the face of the bill.
4. File the paid bill in the alphabetized accordion folder (by name of payee) or in a ‘tax’ folder (if pertinent). I generally like to put the most current item up front, but that is optional.
5. Place all payments to be mailed in stamped and addressed envelopes. Put the envelopes where you will remember to mail them the following day!
Additional considerations:
1. If you pay bills with a checkbook, it is best to maintain a check register and balance your checkbook. That is the only way you will be sure you have sufficient funds available to pay your bills.
2. If you pay bills online and don’t want to balance your checkbook, monitor your account regularly to watch your balance and note any possible unauthorized transactions.
3. Although many find it easiest, I have concerns about automatic debits to a bank account for recurring bills such as mortgage, car payments or utility payments for several reasons:
- I am reluctant to trust anyone to have direct and unlimited access to funds in my bank account.
- If there is a dispute, the money is paid out before I have a chance to contest the amount.
- Once the automatic debit authorization is established, it can require complicated paperwork and months of delay to undo the process.
- Automatic payments relinquish control of my money to someone I don’t know.
- Automatic payments don’t allow me the flexibility to occasionally miss a payment or make it later, if I am temporarily short on money.
CONGRATULATIONS!
At this point, your bills are paid and your desk space should be clear once again. Hopefully the process was simple and easy!
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