Most people will have to pay bills at some point in their lives. Whether you’re paying your own bills or managing someone else’s bills, it’s important to be mindful of deadlines and late fees, which can add up quickly and make an already stressful situation worse. To help you avoid unnecessary stress, this article covers four important strategies that will help you manage and pay your bills on time every month.
What Happens If I Don't Pay My Bills?
The first thing that happens if you don’t pay your bills is getting calls and letters from bill collectors. If that doesn’t get your attention, it will likely hurt your credit score, which can make it difficult to rent an apartment or buy a car. Even worse, late payments can land you in court, where fines and penalties could cost you thousands of dollars. Whether you have trouble paying bills because of job loss or unexpected expenses (like a medical emergency), there are things you can do to reduce debt stress. Take a look at some steps for getting back on track.
What Causes Late Payments?
Late payments aren’t usually caused by irresponsibility; they are usually due to mistakes or unexpected events. One of the biggest causes of late payments is confusion over which bills need to be paid and when. You can avoid these problems if you set up a system for paying your bills that lets you know what is due when, and alerts you if a payment will be late.
5 Steps To Get Back On Track
1. List all of your debts in order from smallest to largest
2. Put together a budget that allows you to pay off debt and still cover your monthly expenses
3. Work your way down from top debt until they’re all paid off
4. Continue with steps one through three until all late fees are cleared
5. If a sudden expense comes up, assess if it’s important enough for you to dip into your emergency fund.
How To Set Up Automatic Payments For Your Bills
Setting up automatic payments can be a great way to make sure you always pay your bills on time. Set it and forget it, right? While automatic payments may seem like a simple concept, there are some things you should know before you set up your next payment schedule. You’ll want to keep an eye out for late fees in case a payment is due while your funds are low. You’ll also want to keep in mind that certain types of accounts will need special billing arrangements if you go with automatic payments. The following are five tips for setting up automatic bill payments so they work for you and don’t put a dent in your budget.
5 Tips For Setting Up Automatic Bill Payments
Having bills automatically deducted from your bank account every month can make bill paying easier and help you stick to a budget.
1. Look for discounts for automatic payments: If you’re willing to have all of your bills paid automatically, ask if there’s a discount for setting up auto-pay. Some companies will also give you an incentive (like a $5 gift card) just for signing up for automatic payments.
2. Open multiple accounts: If possible, open an account with each of your creditors and pay different bills from different accounts so that it’s impossible for any one payment to be delayed or overdrawn.
3. When you’re setting up automatic payments, be sure to ask about any fees or penalties before agreeing.
4. Set aside enough time in your calendar (or inbox) so that it doesn’t become overwhelming.
5. Stick to the script, no matter how challenging it may seem!
What Are Budgeting Tools?
With all of the expenses that most people have, it can be tough to stay organized and not get overwhelmed by your financial situation. Even if you’re spending less than you’re earning, there will still be a lot of stuff for you to keep track of when it comes time to pay your bills. Luckily, there are plenty of budgeting tools and apps that can help take some of that pressure off; no matter what kind of cash flow management strategies you use, they can be instrumental in helping you find and maintain personal balance in your spending. We’ve listed some of our favorites below!
A Budget App That Can Help You Track Expenses
When you have no money in your bank account, it can be tempting to forego paying bills. And who wants a collection agency calling them every day? Luckily, there are free budgeting apps that will help you stay on top of your finances without letting late fees pile up.
Mint: Mint bills itself as a personal finance manager because it does more than just bill tracking. It also offers tips for reducing debt and saves you money through discounts at local businesses. However, if you do need help keeping track of how much goes where each month, Mint will generate an envelope budget based off what its algorithm thinks you can afford.
