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Bills. Everyone has them; no one loves paying them. From mortgages to car payments to cellphone bills, most of us probably have more monthly payments than we’d prefer. And it’s important to stay on top of every single one.
Because many creditors share your payment information with the three major consumer credit bureaus — TransUnion, Equifax and Experian — falling behind on your bills could negatively affect your credit scores, says Dr. James Philpot, a certified financial planner and associate professor of finance and general business at Missouri State University.
Making late payments could also lead to late fees and penalty (higher) APRs on credit cards. Read on for some tips that can help you make your payments on time.
1. Make a list of every bill
It’s almost impossible to pay all of your bills on time if you don’t know all of your obligations — so identifying all your creditors, vendors and service providers can be a good place to start.
“First, make a list of all your bills,” advises R.J. Weiss, a certified financial planner and founder of The Ways to Wealth blog.
If you have a lot of bills to pay, some can fall through the cracks. To help avoid this, check your credit reports and list every lender (leave out accounts that are paid off). Next, review recent bank and credit card statements to add any recurring obligations to your list. This could include gym memberships, cellphone bills, media subscriptions, online services (like music or other apps) and utility bills — among others.
Your list should include the lender or service provider, the minimum monthly payment and total balance due. Once you’ve got your list, Weiss recommends separating bills into two categories: those that can be paid automatically and those that can’t. This will be important later.
2. Find out when your payments are due
Once you’ve got a list of bills to pay, find out when each bill is due and add that to your list. If your due dates are all over the place, you may want to tweak them to make tracking payments easier.
“See if you can get the due dates of your bills switched,” Weiss suggests.
Many creditors allow you to pick or change the date you pay, so go online or call to find out.
While changes may take a few billing cycles to go into effect, having the same due date for multiple bills can simplify your life. And it can be helpful to set up your bills for right after payday if you’re concerned about overspending and not having enough money left to pay them later.
3. Add your payments to a calendar
Now, it’s time to take that list of due dates and put it to good use.
“Create a calendar of when bills are coming due,” advises Jill Dillingham, a certified senior adviser at Senior Checks and Balances in Winnetka, Illinois.
“The system doesn’t haven’t to be complicated,” Dillingham says. “A handwritten calendar listing the creditor, due date and amount” can help you stay on top of where your personal balance sheet stands.
If you use an online calendar, you can add payments there. It’s usually easy to add recurring events, and your calendar app may have handy tools — such as color coding — so due dates stand out from other events.
4. Decide how much you want to pay
For some of your bills, you may have to pay a set amount. Others — including credit cards — may allow you to pay as much or as little as you want after making the minimum monthly payment.
Ideally, you’d pay the full balance due on all your bills every billing cycle, even on the credit cards and other accounts that allow you to carry a monthly balance. This may not always be possible. But for accounts that allow you to carry a balance, you may decide to pay more than the minimum to help you save on interest, avoid building up unnecessary debt or potentially become debt-free faster.
If you’re going to pay an amount other than the minimum or full balance, note this on your list of bills to keep track of the situation.
5. Set up automated payments whenever possible
Armed with your list and your calendar, it’s time to set up your payment system.
One approach is to pay as many bills as possible automatically.
“Automate regularly occurring monthly bills,” suggests Emily Stroud, a chartered financial analyst and owner of Stroud Financial Management in Fort Worth, Texas. “It’s just too easy to get distracted and forget to write a check or get to the post office.”
When you set up automated payments through creditors, you can — with accounts that allow it — specify whether you want them to debit the minimum due, the full balance due or another amount. Weiss suggests that if you intend to pay more than the minimum — but aren’t sure how much more — you should still set up an automatic payment for at least the minimum in case you forget to pay manually.
While many lenders accept automated payments from bank accounts, you may also have another option for certain monthly obligations.
“I have all of my regular bills charged to one of my credit cards,” Philpot says. “That way, I earn more rewards points.”
A word of caution: We only recommend using a credit card to pay your monthly bills if you’re confident you can afford to pay the card on time and in full. Otherwise you may build up a balance that will charge you interest — and that could undermine your efforts to stay on top of your bills.
6. Devise a system for manual payments
While it can be a good idea to autopay as much as you can, you may not be able to pay everything automatically — or you may not want to. So for those bills you pay manually, you can set up a separate system. Here are two good options …
“The best system for me is to pay bills immediately,” Philpot says. “This gets it off the to-do list.”
If you take this approach, the goal is to pay the bill right away. You can go online and make a payment as soon as your statement posts or bill arrives — or you can sit down and write the check, put it in an envelope and drop it in the mail the next time you go out.
If you don’t want to jump online every time you get a bill or stop what you’re doing to write a check, you can set aside a regular, recurring time to pay your bills. It may help to schedule a block of time on your calendar. But even if you take a less formal approach, try to make it part of your routine.
“Once you get in the habit of paying bills at the same time every month or every week, it won’t seem as daunting,” says Jane Tower, a certified financial planner and owner of TOWERBooks, a bookkeeping service in New Orleans.
7. Sign up for reminders
Whether you autopay or handle bills manually, it’s helpful to be reminded when bills come due.
“I suggest setting up reminders on your calendar or in your phone as another check and balance,” Stroud says.
You can remind yourself to make a payment or to check if an automatic payment cleared.
Your own calendar reminders may be enough. Another approach is to use a specialized app for organizing your money and reminding you about bills.
“There are plenty of options to choose from, ranging from free to paid,” Tower says.
You may also be able to sign up for alerts directly with creditors and vendors.
“Some firms let you sign up for email or text reminders,” Philpot says.
The right approach can help you pay your bills on time. By developing a system and sticking to it, you can make paying your bills on time easier. It may seem like a lot of effort, but it’s worth it to help maintain good credit scores, which can help you qualify for favorable rates if you borrow in the future.