They weren’t exactly forgotten, but unpaid all the same.
Our habit for doing our budget and paying bills consists of throwing everything in a pile and then sorting through the file when we sit down to enter all the data for our budget into the spreadsheet. One of the first things we do is go through and find the unpaid bills and pay them. When we sat down to do budget last night, we found our mistake. One of the bills was sitting at the bottom of the pile. Not a big deal, until you consider that we hadn’t been doing very well on regular budget checks and the due date for the bill had come and gone already. Ouch. To make matters worse, it was a credit card, so we’ll see what kind of late fees and default rates we end up with next month.
Lesson learned. From now on, we’ll be paying bills as they come in instead of letting them wait until we do our budget work. The other thing that I’ve been contemplating is to set most everything up on automatic payment systems. I’ve been super hesitant to do this before because part of our financial history is a history of not having the money to pay our bills. So, my fear has always been that if they come out automatically, the money won’ t be there, or the money won’t be there later on to pay for something more important. Now that we’ve taken on budgeting and a much higher control over our money, that really isn’t a valid fear anymore and we could probably set up some automatic payments.
How do you all do it? Pay as they come in? Automatic deductions? Or do you pay them at a set day or event?
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It happens to the best of us 🙂 Last year, we finally got to the point where we could pay bills right when they came in, which really helped ease some of my stress in managing finances. About two years ago, I started assigning bills to paychecks, so to speak. I have an excel chart that lists out each pay date and amount for me and my husband (I’m paid twice a month, he’s biweekly). I then went through and listed out each bill and regular savings under a specific paycheck, and had excel calculate what was left over each paycheck for food, spending, etc. Then I could go through and adjust bills forward and backward so they would be paid on time and we still had a somewhat reasonable amount of money left. This has been one of the most successful tracking methods for us (I also use Quicken and have tried a thousand different spreadsheets, pear budget, etc.). It’s worked so well that I’ve gotten ahead in paying bills, so I transfer the amount to my credit card holding account at ING Direct, pay the bill when it comes with our reward credit card, and just transfer out the money a month or so later when the CC is due (no balance is carried on this card). Only exception is payments to the three credit cards we carry a balance on, which are scheduled to be paid right at the beginning of the billing cycle, so no holding account for those payments.
A really simple idea to help remember to pay the credit cards, which have the highest penalty if late, is to set an alarm/reminder/calendar event on your cell as a backstop when you get too busy with life. My husband has a hard time remembering things, but has had a lot of success with this.
I have a Google Spreadsheet that lists has a column each for the Payee, Day of the Month Due, Amount typically due, and then a column for each month. The month columns intersect with the the rows for the bills to make little squares.
The bill rows are in order by date due, with those that get paid in the first half of the month at the top, and those in the second half of the month at the bottom.
Whenever it comes time to pay my bills (twice per month), I look at this spreadsheet. Once I have paid one of the bills, I color the square for that bill in the current month.
With this system, it doesn’t matter if I receive a statement in the mail. I’ll always remember to pay the bills that are on my spreadsheet. Also, I tend to use online bill pay to pay them all at once. It’s not automatic because I like having control over the process, but it is efficient.
I only get paid once a month (at the end) so I pay everything all at once. Almost everything is set to automatic pay through my Bank’s Bill Pay service with two exceptions. My student loans are automatically debited on the 5th and because of that, I receive an interest rate discount. I also go online at Bank of America and submit my mortgage payment through their website.
I would suggest looking through the bills when they come in just to note the payment due date. That way, you know if you need to take immediate action on a particular bill before you sit down to do your budget work.
I have a hybrid system that puts all bills on credit cards and then I use ING to push a payment to the credit cards instead of letting them draw from my account.
I would seriously recommend that you go into ING and make ING send out the payments on the date that you want, instead of letting the creditor pull from your account.
This way the bills get paid automatically but you have control over when the money goes out. I get paid at the end of the month as well but most bills are due at the beginning of the month. The first month was hard to set up but after that it all flows nicely. (If you need a referral for ING to get a bonus when you open your account let me know!!!!!)
I suggest a mix of pay as they come in and Google Calendar. Maybe do 1 or 2 bill-pay days a month and put the days in your calendar so it’ll send you an email reminder in the morning.
Batch the bills in a basket or something, and then when the day comes, pick them up and pay.
Good luck!
Austin @ Foreigner’s Finances
Damn that is a big annoyance…. but as others say, it happens! I hope the charges are not too huge and the new pay as they arrive policy works out.