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.
I tend to forget about these bills and end up getting chased down by the companies and in turn paying a late service 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 dishonor fee of nearly $60 depending on the bank.
As a result, I have created a system to ensure I do not forget to pay my bills and all charges go ahead without any late fees (while still making sure I wait until the very last second to pay each bill in order to earn more interest on my everyday savings).
Here is how I do it and a few examples of how I got my bills organised to ensure I never got late fees and dishonor payments again. I wonder if this has inadvertently helped my credit rating also by ensuring regular payments are always received?
Listing all monthly bills
Firstly I listed all monthly bills, every single ‘out going’ payment I had to make. The charges for these would vary depending upon my usage of the services, but either way I knew that the bills would come on certain days. I listed the bills from each month and double checked that I hadn’t forgotten anything. Some of the bills were also quartly or fortnightly, so I specifically noted which they were next to them – I suggest using an excel spreadsheet for this.
Finding out how many days I had to pay the bill
After listing all the bills, I checked each invoice to ensure I realised how many days I had to pay. Some of the bills allow me exactly 2 weeks, while others were taken out of my account on any given week or fortnight. Establishing how many days you have until payment is due, will allow you to set reminders closer to the time in order to hold onto your money for as long as possible. They way I see it, 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 my list is compiled, with details of how long each bill has before payment is required – I can look at the average cost of each bill. The best way to do this is by comparing 2 months of bills (hopefully you have them on hand). I noted the different payment amounts and categorised them into bills under $100, bills under $500 (and over $100) and bills/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. I figured that these bills were best set to auto pilot, meaning I could organise my online banking to worry about these and limit my own need to think about them on a monthly basis. I established each of the bills in my online banking as BPAY items and organised for payments to come out of my ‘bills and utilities’ savings account that I had linked on my everyday account so that each bill was paid 3 days before its due date on a monthly cycle.
These bills are now set to auto pilot and I will have them paid in full from my account that I regularly deposit (on auto pilot also) a given amount each pay cheque to ensure I am covered for all of these costs.
Bills under $500 (and over $100)
These payments are in the category of ‘substantial’ for me – anything over $100 is a large number and needs my ‘human’ checking before payment. The way I ensure I never forget these are by taking these items from my bill list, and setting auto reminders for the dates they are due in my Outlook calendar. If you do not use outlook, you can use something similar via your online email service such as;
- Gmail (Google Mail) via Google Calendar
- Hotmail Calendar
- Yahoo Calendar
- ANZ Money Manager alerts
Setting up these reminders in the above services will allow you to be emailed 3 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. Doing this means that you are constantly hassled by these reminders until you dismiss them.
Bills and payments over $500
As you can imagine, these payment are big hits from your savings account. It is best to realy take the time to ensure you transfer the correct amount of money and that it is 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 on auto pilot, so you can leave that and forget about it. For the other items, I also inserted these into my calendar for reminders. I still managed to find myself forgetting some of the due dates which lead me to put my credit card down as direct debit, that way I didn’t have to think about the payments and could just top up the credit card account as each payment was taken. Doing this saved me the dishonour fees that I seemed to be constantly getting.
Using the above with the traditional way of paying bills
Every time a paper bill would come in, I placed it in my bill drawer and noted in my diary the due date of the bills + a reminder 2 days before. As each bill was paid, I wrote on the bill that it was paid and filed it away along with crossing out the tasks in my actual diary.
Doing both digital and traditional methods of bill management meant that no matter what, I had all bills paid on their correct dates and as close as possible to when they were due.
I could easily say that this has saved me around $500 a year in late payment and dishonour fees. Not bad for just a bit of bill organisation in my opinion.
How do you remember to pay your bills?
Do you just use the old fashioned way? Or do you use third party reminder services such as ANZ Money Manager? Tell us, it will only take 10 seconds – you know you want to! Comment form below.