Let’s talk about bills. No, not the football team, but those pesky little pieces of real or virtual mail that remind us of the joys of adulthood. If you read that in a sarcastic tone, you’re on the right page. Whether we like it or not, bills are very much a fact of our adult lives. We may have learned how to calculate interest in high school, but did anyone really teach us how to pay bills? If you are struggling to manage your monthly debts, here are some tips to help you pay those pesky things on time. Who knows? Maybe you’ll save enough cash to go cheer on your football team for real!
School may not have taught you all about paying your bills, but researching how late payments work and knowing what affects your credit will help you with your understanding of bill payments.
For instance, did you know that late fees can cost you an extra $25-35 or that 35% of people have paid a bill after its due date? For a start on your knowledge, check out this Forrent.com article.
Monitor Your Expenses
Before you can accomplish the next step, purchase a notepad and keep it handy — one with bill folds would be perfect! Relax, we won’t ask you to write down what you ate for lunch or your dreams for the future.
Simply keep track of your spending. No matter how small. Write down expenses. Write down the $1.38 you spent on coffee this morning. EVERYTHING. Before you can adequately balance a budget, knowing what you spend and where you could cut back on is imperative.
Keeping track of every cent will show you if you go to the movies more times than a critic, or if your shoe addiction is getting too intense. Remember to pay attention to bank fees!
Start a Budget
This is most challenging part of keeping track of bills and, spoiler alert — it’s not that hard! Once you’ve tracked your spending and cut down where you need to, it’s time to create a budget and stick to it.
A successful budget balances out income with expenses. Examples of income are your full-time salary after deductions, or side job hours. Expenses are everything from transit to food, clothing to loan payments, and everything in between.
If you have extra income, you’re ahead of the game, now get to saving! If you spend more on expenses, you are incurring debt. This is not good. As a general rule, your monthly expenses should never outweigh your monthly income. Take steps to cut back on expenses.
Use your budget to keep track of when bills are due and how much you will need to set aside for them. You can also set aside emergency funds by saving a tiny bit each month.
If you lack time, or as addicted to your smartphones as most people are, consider downloading a financial management app. These tech-savvy programs can manage your budget for you, as well as alert you to your spending habits, and even sync with your loans.
Financial management apps are fairly user-friendly and great for anyone looking to get a handle on their money.
Whether you choose to utilize the alerts built right into your smartphone calendar or you prefer to use a sharpie and a wall hanging flip calendar, setting reminders is the ideal way to remember to pay.
Give yourself a couple days for the payment to show up to the provider, and you will also avoid late fees and possible interest rate hikes!
Consolidation tactics can be used in two ways. To save a little on some services, you can research bundles, consolidating necessities like phone, Internet, and cable into one bill. If you’re a renter, you can speak to your landlord about the possibility of paying an all-inclusive rate as opposed to rent plus utilities. Combining services doesn’t always save a ton, but every cent counts!
Another type of consolidation to consider is debt consolidation. If your expenses are eating you up, it may be time to contact a debt professional and combine your loans/lines of credit into one bill.
Repairing your debt situation now could be worth the lower credit score you might be left with for a year or two. The key is not to add any new debt while paying off the old debt.
There is no easy, sunshiney way to put it — being an adult is hard! Getting a secure handle on bill payments and processes is one way to set yourself up for success as the years go billfolds. Use these tips to improve your financial situation and impress family or friends with some money-savvy expertise.