As a Daily Money Manager I routinely help my clients achieve a specific financial goal: pay bills on time and create a system that’s easy for them to manage. In previous posts, I’ve talked a lot about reducing paper clutter, the chaos that typically surrounds organizing one’s personal and professional financial life. If you’re just catching up and your desk holds a mound of unsorted and unfiled paper, I encourage you to read those posts about gaining control before proceeding to this step.
First off I’d like to say there is no one way to manage paying your bills. With that said, there are really only two methods: by hand with good ole fashioned checkbook and pen or electronically. My advice is choose one. It’s a little like trying to manage two calendars – things get overlooked or fall through the cracks. So as you are tackling this important financial goal — paying bills on time — commit to one and proceed from there.
Influx of Mail
As mail comes in, choose one specific spot to put it. Select a container like a decorative basket or bin that will hold up to two days worth. If it holds more than that, you’re not solving the problem. Use that Bed, Bath & Beyond 20% coupon you’ve been saving and buy one that you won’t mind sitting on a table or counter.
You’re trying to create a habit and designate a spot where you can drop the mail when you get into the door each evening and then sort later. Some clients like to sift through the mail immediately, separating junk mail and those recyclable circulars in the appropriate trash bin or shredder. Others like to go through their basket while watching TV or as they are preparing dinner. Whatever you choose, be consistent. Once you’ve separated the bills out open them and remove any newsletters, inserts or other non-essential items. You want to be left with the bill itself and the return envelope. Put all your bills into a file or plastic envelope to collect them for when you’re ready to sit down and pay them.
Scheduling a Time
Decide how and when you want to pay your bills. I’ve found that achieving any type of financial goal starts with a mindset. Do you want to pay weekly? Bi-weekly? I don’t recommend once a month, as you may miss important due dates. Once you decide the frequency, calendar it. Just like any other important meeting on your schedule, you need to honor it. Choose a time where it’s realistic that you can follow through with minimal interruptions.
Next time I’ll talk about how to pay your bills in different ways.