Put your finances on autopilot
Like a lot of people, I used to miss payments by a day or so, forget to pay the garbage bill, etc. I put my finances on autopilot as much as possible, and while expenses still sometimes exceed income, I spend much less time paying bills, writing checks, calling companies to get late fees waived and so on. Here's a couple of great articles on automating your finances.
This is great general advice. It's especially good for those of us with unsteady income, like freelancers and contractors. Or chronically underemployed 🙂
This one is a little more specific. I don't subscribe necessarily to having auto debits set up with the debiting company, like the cable company, unless I can pay for it with my credit card.
You see, my system is quite simple: If I can have the companies with which I do business debit my credit card, I set that up immediately. I use one credit card only, which I pay off every month. It is an airline miles card, and over the last few years, along with promotions, dining out, etc., I've racked up close to 200,000 miles.
There are other advantages to using one credit card for as many bills as possible. First, I get a log each month of everything I've spent money on. Using Quicken or Money, one can easily analyze, categorize, set up a budget, etc., using the credit card company statement as a money log.
Second, there's only one bill to pay dozens and dozens of companies.
Third, I use the credit card company's money for a month or so, interest free.
Finally, I get airline miles. Miles have become more valuable now that jet fuel has risen with the price of crude oil.
For those companies that cannot or will not (or will, with a fee, which I won't pay) bill to a credit card, I set up bill pay with my bank.
There are two types of 'bill pays': recurring and non-recurring. Car payments, for example, are due on the same date and for the same amount each month. I consider these to be recurring. The water bill varies, so I consider it to be non-recurring, in that I have to adjust my bill pay for the amount every single month.
My checking account at my local bank, Washington Mutual, or WaMu, serves as the center of my 'star' network. All money flows into and out of this account. Outflows are automatic investments at eTrade, Emmigrant Direct (high yield online savings account), paying off the credit card balance, and any other bills that I cannot pay with a credit card.
Inflows are paycheck, tax refunds, affiliate payouts, drug money (kidding), and any other miscellaneous cash I might come across.
I have also tried to go paperless on as many bills as possible. This saves me time (I don't go through as much mail, though it's still so terribly ridiculous how much crap I get) and is my small contribution to saving the planet. Or at least the trees on the planet.
Every time a get a bill, I schedule its payment through my bank, online. If a recurring bill, I just ensure that the due date and amount haven't changed. If a non-recurring bill, but a bill I've paid before, like the water bill, I login, set the due date and amount, and I'm done. If a new bill (like a hospital bill — I've received lots of these since my baby was recently born), I set it up and schedule it. It takes about 30 seconds.
It's really a simple system. I write maybe one or two checks every few months. I pay no postage. I save time. And most of all, I save my sanity.
Now that I have 2 children, both under the age of 2 — one less than 2 months old — I spend very little time paying bills.
Try it out.