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Have you ever had that sinking feeling when you’ve checked your bank balance only to find it much lower than you thought, because there was an automated withdrawal of one of your bills that you totally forgot about?
Or even worse, your bank contacts you because an automated payment couldn’t be paid due to the fact that you forgot all about it and spent what you thought was spare money on a fab night out!
Keeping track of your bills can be a complete headache. There are the household bills, vehicle bills, credit card, and loan bills, vet bills, and about a million other bills if you happen to have children.
Why you need to keep your bills in order
Even though it may be a headache to keep track of all of your bills, the penalties for not doing so can be high. If you happen to lose track of a bill and miss a payment, your credit file will take a battering and you’ll undoubtedly incur a late payment fee too.
It’s therefore essential to ensure that you have a system in place so that you can keep on top of them all. It can seem overwhelming at first, but it’s not difficult and I’ll show you how.
Start by making a list of all of your bills
Gather all of your statements and bills. Write each one down on a sheet of paper, along with their due date and amount. Next, write down how these bills are usually paid. Are they paid automatically through your bank or do you have to pay them manually? You’ll probably find that you have a mixture of payment methods.
Reduce the volume of bills where possible
One reason why we may miss a bill is due to the sheer volume of bills we are responsible for. If you largely receive your bills through the post, it’s easy to see how you’d misplace one or two bills, or put them aside with the intention of paying and then totally forget.
If you can, try to consolidate as many bills as possible. Take a look at your list. If you have two or three credit cards, can you transfer them all onto one interest-free credit card? That way, there’s only one bill to pay instead of three.
Decide how you’d like to pay these bills going forward
With online banking, it’s now easier than ever to set up automated payments by direct debit, and I highly recommend you set up automated payments on as many of your bills as possible. This eliminates the likelihood of you forgetting to pay a bill. But remember, you need to actually have enough money in your account to cover your bills otherwise they will go unpaid and you may be charged.
PAY ONLINE OR VIA TELEPHONE BANKING
Paying online or via telephone banking are both popular options. But it’s important to set up reminders of when your bills are due. You can do this on your phone or on a specialised bill payment calendar.
Paying a bill in person is a possibility. Many bills can be paid at the post office or in your bank. Again, you need to set reminders so that you don’t forget to pay a bill and you need to be organised and have all of the correct paperwork with you when you go to pay the bill.
Many people use a pre-payment method to pay their gas and electricity bills. Gas and electricity can be pre-paid by topping up a key or card. However, this is a more expensive way to pay and if you don’t manage to top up in time, your gas and electricity are cut off.
Designate one home for bills
Once you have decided on your preferred method of payment, it’s important to keep all of your bills in one place. This stands, whether they are paper bills or electronic bills.
For your electronic bills, set up a dedicated folder for them in your emails. Name it something like ‘bills to be paid’ and direct all due bills to that folder. Likewise, create a folder for bills that have been paid. Name it something simple, like ‘paid bills’ and direct all payment confirmations, etc into that folder.
For paper bills, it’s important that you set up a space in your home just for those. Something like a dedicated drawer or a letter rack will do the job. As soon as a bill drops through your letterbox, place it straight in the designated space. You need to set a date each week to check in with these bills and pay them. As soon as they’ve been paid, file them away, but be sure to sort through your paper statements regularly. Most utility bills only need to be kept for around 3 months, so once you know they’ve been paid and there are no issues, you can shred them.
Keeping track of irregular bills
Just to throw a spanner in the works, some bills aren’t paid monthly. Things like your MOT and servicing, car repairs, birthdays, Christmas, etc all need to be paid at some point. But it’s easy to forget about them until they’re right upon us, and then we’re left scrambling around trying to find the money for them.
For these kinds of bills, I use sinking funds. I have set up an automatic transfer for a set amount each month. The money is taken from my current account and deposited into a savings account. The money builds up there until it is needed for one of these irregular bills.
The final step in staying on top of your bills
The final thing you need to do to stay organised and on top of your bills is to record all of your bill due dates onto a calendar.
Simply print off a bill calendar and write in the dates each bill is due. I write in my sinking fund transfers too. For example, if you have set up a monthly transfer from your bank account to your savings account for your sinking funds, simply mark the date that the money leaves your current account on the calendar.
Using a bill calendar will give you a nice, clear overview of all of your monthly bills and you’ll be left with no nasty surprises.