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How a better bills system will save you money

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Have you lost money because you don’t pay your bills on time?  Did you know that can negatively affect your credit score? We all have bills to pay and if you are disorganized you can lose money and much more.

The average household is paying a total of $6,658 in interest per year.Roughly 1 in 4 adults don’t always pay their bills on time, according to the NFCC’s 2015 Financial Literacy Survey, sponsored by NerdWallet.They also found that among  adults ages 18 to 34, just over half are paying their bills on time and have no accounts in collection.

Payment history is the most important factor of your credit score, and having 100% on-time payments puts you in the best position to have a healthy credit score

Receipts

Create a system to deal with your receipts.   Because I am a small business owner, I need to keep track of my expenses, including items such as heat and electricity because I work from home.

My system for saving receipts is two fold.  I try to simplify as much as I can. If I have a paper receipt, I place it in a big envelope marked RECEIPTS. I also have a file folder that says TAXES. If the receipt is to be used for taxes, it goes into the file after I have checked in on my credit or debit card. Always do this! I just found an error last week on a credit card purchase.

In my email account, I have a purchases folder as well as a tax folder with the year. If a purchase is tax deductible, I move it to the tax folder after I have checked it against my credit card statement.

Because my system so easy, I will maintain it. It doesn’t matter how you set it up, but it needs to work for you and your lifestyle and something that you will maintain. If you create a system for your receipts, but never use it, it will not work.

Bills

Have a place where you keep all your bills. One consistent place! Don’t change it; keep it the same place so you know where your bills are.

My first tip is to open your bills.  I have had clients bury their head in the sand and be afraid to open them. You can’t correct a problem if you don’t face it.

Next, check your credit card statements and bills!  I have found errors and also discovered when the pizza deliveryman was adding a credit card tip on top of the cash tip we gave him.  You would be amazed at the number of people who don’t reconcile their credit card and bill statements each month. Do it!

I encourage you to open your bills as soon as you receive them, so if there are issues, you can correct immediately and still have your bills paid on time.

In my household, I pay the bills. If you are married or sharing a household, I suggest leaving it to one person. Make sure you have a system that everyone can easily use.  Maybe you take turns every other year so not one person is in charge of paying the bills forever.

Choose two times a month to pay bills. Most people do it on the 15th and 30th, but do what works best for you.  Two times to pay bills monthly should have you covered.

Establish a set place for paying your bills and find a place to store your checkbook, pen, stamps and envelopes.  Return them to the same place every time you use them.

Tips: Put your account number or your insurance number when paying by check so if your bill gets separated, your check can be applied to your account.

Mark Tax with a colored pen in your checkbook, or make a check mark so you can easily find tax deductions.

Electronic bill paying

Many companies have moved to accepting online payment and this can also save you money with no more stamps and usually time.

As with paper bills, you need to set up a system.

I suggest setting up an email address dedicated to bills only.  For example, coracciobills@gmail.com.

In some cases, such as with my mortgage, you can designate the day and amount where your payment is deducted.  Bills such as electric or gas that usually vary from month to month usually need to be paid or you can opt to have a year long plan where they estimate your year and you pay a similar amount each month.  Choose two times a month to pay your electronic bills.

MintBills is a free app is designed to help people stay on top of their bills by monitoring bank and credit card accounts. If you drop to a dangerously low bank balance or a bill is coming due, it’ll let you know.

For a fee, you can use FileThis to link with your all online accounts and get a complete overview of your accounts: Banks, Wealth, Health, Auto, Utilities, Communication and Retail.

And finally have gratitude when paying your bills, especially if you begrudgingly pay your bills. I always write a thank you enclosed within a heart on my checks. A teller at the bank told me they wouldn’t see it, but I know they would feel it and it is also an important ritual for me to do.

Take actions:

  • Create a system for managing receipts and bills that is easy to maintain; Be consistent and keep in the same place.
  • Choose two days each month to pay bills; most people do on the 15th and 30th, coinciding with paydays.
  • Have gratitude when paying your bills, especially if you really dislike paying them.

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About Julie Coraccio

Julie Coraccio considers herself a Chief Possibility Officer and often asks, “What else is possible?”An award-wining professional organizer, certified life coach and author, Julie is passionate about getting people organized, supporting them in clearing clutter in all areas of their life and becoming more mindful and aware in both home and work. She hosts the popular podcast Clearing the Clutter Inside & Out. Based in Raleigh, NC, she works with people around the globe. She is happily married to Tony and is at the beck and call of their two rescued black cats, Joey and Antonio. http://reawakenyourbrilliance.com https://itunes.apple.com/us/podcast/clearing-clutter-inside-out/id914959979 https://twitter.com/ReawakeBrillian

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