4 tips for staying on top of your bills
Paying your bills is a part of your monthly expenses. At least, it should be. Not staying on top of your bills can have major financial consequences, such as cancelled insurance policies and declined credit cards. That’s why it’s important to know the cost of your expenses, set a budget so you can afford all the necessities and set up a schedule to ensure you pay your bills on time each and every month.
Late payments can have long-lasting effect on both your personal and financial life. Repeated late payments can harm your credit score and lead to late fees. All this to say it’s much easier to manage money wisely and stay on top of your bills rather than deal with the backlash of having late payments.
Here are four tips to help you stay on time and on top of your bills:
Know how much you owe
The first step towards getting your bill payments in order is knowing how your monthly expenses fit into your monthly budget. Gather all your bills from last month, including your cell phone, hydro, cable and credit card bills to see how much you owe each month.
If your late payments exist because your expenses are greater than your income, it’s time to make cuts and set a budget. This will help you adjust your spending and start living within your means. When your income exceeds your expenses, you can rest assure that you’ll be able to keep your bills up to date.
Set up a payment schedule
Sometimes late payments happen because people miss the due date. Life is busy and sometimes deadlines get away from us, but that’s a bad (and costly) financial habit. It’s a smart idea to set up reminders for payment due dates. This ensures payments are always made on time – or even better, ahead of time.
Set up automatic payments
Setting up automatic payments is one way to ensure you stay on top of your bills. One very common money management mistake is using a single paycheque to pay all of the monthly bills, which can leave very little money for living expenses until your next payday. If people don’t have enough money to live, they turn to living off credit and that’s another bad financial habit.
The solution is to split your bills in half. Once you know how much money you owe for each of your bills, set up automatic payments from your chequing account to your bills with every paycheque. You may be paying bills a little bit in advance, but it’s easier to make smaller payments more frequently than it is to try and squeeze all of your monthly expenses into one paycheque. You may even have some money left over to start saving.
Start an emergency savings fund
Living paycheque to paycheque works for daily living, but what if one month you have an irregular bill? An unexpected auto expense that isn’t covered by your auto insurance policy or an unusually high cell phone bill can really set you back financially if you aren’t prepared. Starting an emergency savings fund can help relieve the financial stress of unforeseen monthly bills.