Paying your bills on time can be a real headache if your funds are limited. But streamlining the process can be quite simple, if you go about it the right way.
The very best way to ensure you keep enough money aside to pay bills, is to set it aside before you even see it! It’s human nature that the more we have in our bank account, the more we’re inclined to spend, so the key is not to have it in your bank account in the first place.
Many companies have the ability to split your salary up and pay it into two or three different accounts. So for instance, you can ask your employer to pay a portion of your salary direct into your mortgage. If you have other fixed amounts that you pay each month such as a bank loan, or a credit card, then you can usually get money paid direct into those, too.
You can also cover your variable bills this way, by setting up a bank account specially to pay them. Add up your bills for the year (estimate the ones that vary) and divide that by 12. Direct your employer to pay that amount into your special account each month, and then you’ll know you always have money in reserve to pay your bills.
If it’s not the budgeting that worries you but just plain remembering to pay bills when they’re due, then your best friend is the credit card. Note this only works if you are disciplined! Get yourself a credit card with a 55-day interest-free period (these are the cards where you don’t pay any interest if you pay the bill on time each month). Pay your bills with the credit card – because you’re not going to be paying interest, you can do this as soon as you get the bill, so there’s no chance you’re going to forget to pay it. At the end of the month, you’ll only have one credit card bill to remember! However, if you are going to be tempted not to pay the bill off in full each month, using the credit card system could land you in deeper trouble – so take care!
Another way to deal with bills is to set up regular payments from your bank accounts. Be cautious about “direct debit”, which is where you give authority to the biller to take money out of your account each month. Because you’ve given them authority, you can’t just tell the bank to stop taking the money out if you cancel the service. If the biller isn’t efficient, they can keep taking money out of your account even after you’ve cancelled, and it can be difficult to get the money back. Most banks have ways in which YOU can authorise a regular monthly payment to a biller, it’s worth checking with yours.