We all have a number of bills to pay each month, ranging from mobile bills, home phone bills, gas bills, water bills, pay-TV bills, car repayments, mortgage repayments - the list goes on.
We tend to forget about these bills, and end up getting chased down and forced to pay a late-payment charge fee. This fee can range from $10 to $50 depending on the company. If you have direct debits coming out of your account, the bank will even charge you a fee of nearly $60 depending on the bank.
To counter this, create a system to ensure you pay all your bills on time to avoid late fees. Below, we’ll show you how to get started.
Easiest way to list all your bills
Firstly, list all monthly bills and every outgoing payment. List the bills from each month and double check you haven’t forgotten anything. Some of the bills might also quarterly or fortnightly, so note down which of these are - you can use a budget planner spreadsheet to easily track them.
How soon do you need to pay bills?
After listing all your bills, check each invoice to see how many days you have until payment is due. Establishing how many days you have until payment is due will allow you to set reminders closer to the time, and let you hold on to your money for as long as possible. Why pay a bill early when you could be earning interest on that money in your high-interest savings account?
Listing the average cost of each bill
Now that your list is compiled - along with details of how long each bill has before payment is required - look at the average cost of each bill. The best way to do this is by comparing two months of bills. Note the different payment amounts and categorise them into:
- Bills under $100
- Bills under $500 (and over $100)
- Bills or payments over $500 (items such as mortgages, car repayments and the like)
Grouping the bills into different cost-categories can allow you to formulate a plan that can easily manage them all.
Bills under $100
These bills included mobile bills, home phone bills and monthly service charges for multiple different services. These bills are best set up with automatic payments, meaning you can organise online banking to worry about these and prevent you needing to think about them on a monthly basis.
Organise for payments to come out of a ‘bills and utilities’ savings account linked to your everyday account and aim to have each bill was paid three days before its due date on a monthly cycle.
These bills are now set to auto pilot and you will have them paid in full from an account that you regularly deposit a given amount of each pay cheque into.
Bills under $500 (and over $100)
Anything over $100 is a large number and needs to be double-checked before payment. You can use a digital calendar to ensure you never forget about these payments, and most people will be able to use either:
- Gmail (Google Mail) via Google
- Calendar Outlook Calendar
- Hotmail Calendar
- Yahoo Calendar
- ANZ Money Manager alerts
Setting up these reminders in the above services will allow you to be emailed three days before they are due on a weekly, fortnightly or monthly basis (even quarterly if you like) and alert you with sufficient time to make the transaction yourself from inside your internet banking provider.
Bills and payments over $500
These payments are big hits from your savings account. It is best to really take the time to ensure you transfer the correct amount of money and that it is always on-time - odds are that these will include mortgage payments, rent, car repayment or other payments of substance and if you don’t pay on time you will find yourself with a bad credit rating.
Your mortgage is likely to come out of your account using automatic payments, but for the other items you can use add these to the payment calendar for regular reminders. If you have a large number of payments - this is a great way to avoid mounting penalties and late fees.
How to manage every bill payment
If you still receive paper bills in the mail, make sure you make a note of this on your payment calendar and keep the physical bill somewhere highly visible. As each bill is paid, physically write on the bill that it has been paid and file it away in a separate storage box.
Committing to both digital and traditional methods of bill management will mean that, no matter what you do throughout the month, all bills will be paid on their correct dates and as close as possible to when they were due.
While this won’t necessarily save you money, it does something much more valuable: it prevents you from unnecessarily losing money.