Bill Paying 101

Paying your bills on time every time can boost your FICO (which can lead to lower interest rates) and help you maintain good cash flow and avoid building up too much debt. Bill paying helps keep you in touch with your budget as well. How to pay your bills may seem obvious, but some folks still struggle to pay their bills on time, every time. Here are a few tips to keep you in the green when it comes to bill paying.

If at all possible, pay bills in annual lump-sum if you can. This works great for bigger items such as software subscriptions, streaming services, home and auto insurance, quake insurance, renter’s insurance, and property tax just to name a few. The perks of paying annually include one less thing on your to-do list, possibly a better discount, and less risk of coverage lapse. I am fan of paying a bill annually if at all possible.

My next tip is to use auto-pay if available. I like to have monthly recurring charges like utilities on auto-pay. This way you never miss a payment due date. As a bonus, if it’s tied to a favorite credit card that offers perks (cash-back or miles), you can really build those up over time.

Learn your billing cycles and due date for various accounts. Once you know your billing cycle, you can schedule reminders or even sign-up for due date reminders. That way, you know in advance when a bill is due and are less likely to miss a payment. Most services offer billing reminders these days. If you have a service that doesn’t, find out the due date and put it in your calendaring system as a recurring item. You might even be able to sign-up for email or text notifications about due dates.

Get organized. Create a bill paying time and bill paying location. If you are digital, this location can be anywhere you have Internet access. If you have a favorite desk, workspace, or sitting area, these can all work. Just make sure it is a consistent routine and a comfortable location.

Allow time for the payment to transmit and post. Check the provider’s terms for posting payments. For example, your credit card may have different posting times than say, your cable provider. You want to make sure your payment has time to be transmitted (electronically, or by mail), and to be received and posted by the actual due date. If you are still mailing payments the old school way, allow for a few extra days due to delivery and carrier disruptions.

Don’t forget, if you have irregular income, you can always prepay your bills! This essentially creates a credit for you and your provider will generally apply the credit on the due date. Key here is to keep track of how far ahead you are paid up. It’s great to be paid in advance for say, the electric and gas, but you may not want to get too far ahead on something like your car loan. Paying ahead can be advantageous if you have a lower income month.

Processes change over time and services arise that can be very useful. If you don’t like paying your bills on your own, you can always consider hiring a money manager if you have the extra income. You can also use something simpler, like an app. Whatever works best for you.

As an independent CERTIFIED FINANCIAL PLANNER™, I can help you make better financial decisions. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #billpay #CFPPro #savemoney