Strategies For Paying Your Bills
No one likes paying bills. And yet, for most of us, they are just a fact of life. There are bills for everything—from our cell phones to our electricity—and even though they are generally due every single month, sometimes it can be a challenge to stay on top of them.
Like most things that aren’t particularly pleasant to do, it can be tempting not to think about paying your bills. But avoidance is usually not the best way to get on top of things.
Sometimes, bills can be pretty regular. For instance, though your electrical bill may vary from month to month, chances are the amount will stay relatively reliable unless you buy some new appliance that suddenly starts driving up your costs.
The same goes for your phone bill. The amount you owe may stay stable unless you do something like take a one-hour phone call while roaming in another country.
Other times, bills may be unpredictable. This can be especially true when it comes to credit cards. If you aren’t sticking to a budget, the amount of debt you rack up in a billing cycle might vary drastically from month to month, and sometimes an unexpectedly high bill can catch you off guard.
Of course, there are also those rare unexpected bills, like medical and dental bills, that can come up rather suddenly and knock the wind out of us. These types of bills are sometimes hard to avoid, but the good news is that they usually don’t come around with the same regularity as your gas bill.
Though paying bills may not be the most enjoyable experience, there are ways to make yourself feel more in control. One place to start is by establishing habits that can help you stay on top of your bills.
Here, we’ll take a look at some strategies for how to pay bills and simplify your finances that might help you feel less stressed about your bills. We’ll also discuss some ways you could start moving forward if your bills have gotten unmanageable.
Setting It And Forgetting It
These days, most of us have enough to worry about. Keeping track of everything that’s on our to-do list is already a tall order, and when it comes to adding bills to the mix, things can get overwhelming.
If paying your bills is something that you don’t like worrying about every month, then you may want to consider automating your bill payments. This strategy can take much of the guesswork out of how to pay bills and allow you to ensure they are paid on time each month.
The “set it and forget it” strategy may be most compatible with relatively stable bills, so automating bills that come with relative regularity could be an option that makes more sense for you.
When it comes to credit card bills, automation tends to work best for those whose spending habits are relatively stable or who tend to carry more than enough money in their checking account to cover their bills each month.
In other words, if you are planning to automate your credit card bills, you may want to make sure you have enough money in your account each month to cover an unexpectedly high bill. Otherwise, if your bill runs high one month, you could get stuck with an overdraft fee or have to borrow money from your savings if your bill is bigger than your balance.
Paying All Your Bills From One Place
Whether you are interested in automating your bill payments or would rather pay manually each month, one strategy that could help you get a better handle on things is to open and use a separate account to pay all of your bills. Each time you receive a paycheck, you could move the designated amounts of each bill into your bill-paying account.
Often, we don’t know exactly what amount we will owe on a bill until we receive it, but if you’ve created a budget, you will hopefully have at least a rough idea of what you will owe each month and can earmark it as money comes in.
A potential benefit of having a bill-pay account is that this money will be kept separate from your primary account, meaning you may not run the same risk of inadvertently spending that money before you have to put it towards a bill. Separating your bill-related expenses may also help you see the bigger picture of your spending habits as all of your bill history will live in one place.
Streamlining Your Statements
Part of the reason bills may become stressful is because with all of life’s distractions it can be easy to lose sight of what is coming into and out of our pockets. This can be especially true for those who use multiple credit and debit cards or have multiple bank accounts.
Thankfully, there are many resources available for individuals to streamline their statements and get a more transparent picture of what their bills and finances really look like. These apps allow you to track all of your money which can help you stay on top of your spending and stay on pace to reach your financial goals.
Many financial apps break down your spending and highlight your recurring bills, giving you insight into how much you tend to pay every month. This strategy may be helpful for those who currently feel they could use a better grasp on how to keep their finances organized.
If You’re Behind On Bills
Accumulating debt can be easy to do. Paying for things with a credit card has become so quick and simple that racking up a high bill isn’t a rare occurrence for many Americans , especially those who lack a strong understanding of the flow of their money.
And, because it sometimes only takes one high bill that you’re unable to pay off to land yourself in trouble, it’s important to keep in mind some ways to deal if you find yourself falling behind.
If you find yourself slipping and wondering how to pay your bills, there are options. You could start by creating a debt reduction plan to assess where you are currently and what you need to do to get yourself back on track.
When it comes to credit card debt, one possible solution is a balance transfer. Depending on credit score (and other factors), some may be eligible to transfer all or part of an outstanding balance into a lower or zero APR credit card. This may help give more time to tackle bills without worrying about interest.
However, a credit card is still a credit card—and if a balance is carried after the low/zero APR period is over, that could mean more of the same: high-interest debt.
If you notice that your bills are getting out of hand or you find yourself with debt that has become unmanageable, you could also consider a personal loan. Personal loans can be helpful for situations like bills getting out of hand or credit card interest rates that are becoming an issue.
Today, many personal loans offer competitive interest rates and fixed monthly payments, so you can get the funds you need to pay your bills, consolidate your credit cards, or get a better handle on high-interest debt. However, a personal loan is still taking on a debt that needs to be paid off, so it’s not for everyone.
While these debt reduction plans can be strategies that work, keeping your total credit balance manageable is key to keeping debt under control. If you merely keep adding to the balance on the card you just paid off, for example, you’ll likely only end up with a bigger debt load.
After transferring or paying off a credit card balance, you might want to consider putting that card on ice—literally in a block of ice in the freezer, which may work for some people. You might also consider cutting up the credit card you just paid off and removing any saved credit card information on store websites you purchase from. Resisting the siren song of an easy credit purchase may keep that balance at zero and eventually give you some breathing room.
Staying On Top Of Your Bills
Taking the time to find strategies that can help you stay on top of your bills can be a great way to manage your expenses and help you make sure you aren’t missing payments. Finding habits that work for you and help you stay on schedule can not only make bill pay easier, it could help you feel more in control of your finances.
While some of these strategies may help you to gain a better understanding of your spending habits, debt can still sometimes happen. If you are currently dealing with debt or struggling to pay your bills, there are many resources available that may help you regain control of your finances and better understand your financial flow moving forward.
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