Buzz
Finding an organizing method that suits you is essential when managing your bills.
©iStockphoto.com/Ryan FoxPaying bills can sometimes feel like an endless struggle. Every time one arrives in the mail, it serves as a reminder that even after settling one, another will follow in a month. To make things worse, bills often get mixed with junk mail or lost in the journey from your mailbox to your kitchen counter. Without a solid system for keeping track of your bills and ensuring timely payments, late fees can quickly add up. It could even negatively affect your credit score.
On paper, organizing your bills sounds straightforward. However, in practice, it can be much more challenging. Several factors contribute to this. For instance, bills don’t arrive at the same time each month. Your gas bill might arrive on the 1st, while your cable bill comes a week later. Also, each bill has its own due date. Rent or mortgage may be due on the 1st, but a car payment might not be due until the 7th or later. Things can become even more complex if you share bill responsibilities with a spouse or roommates.
However, organizing your bills doesn’t have to be a complicated task. Whether you receive physical bills or handle everything online, there are plenty of solutions to help. You might just need to visit a local store for storage bins or research online bill payment options. In some cases, using computer software to track your bills could be a great way to stay organized.
The key is to find a system that suits your needs [source: Weston]. Keep reading to discover methods for managing bills that come through the mail.
Ways to Organize Bills You Receive by Mail
To begin organizing your mailed bills, start by taking them out of your mailbox. One method suggests not organizing them right away. Instead, designate a bin where you can store all your mail. Then, a couple of times each week, go through it all at once. When you do, make sure you have a separate bin for your bills.
Write the due date of each bill on the envelope and arrange them in order of when they need to be paid. Set aside a specific time every week to review and pay your bills. While doing this, it’s helpful to find a designated spot for your paid bills so that only unpaid bills remain in the bill bin [source: Brynes].
Another approach is known as "The Four Ds." The first D is for dump. Begin by dumping all your bills and paperwork on the floor. The second D is for distribute. Go through everything and organize it. Staple pages of the same bill together to avoid losing them, and if something hasn't been paid, write a check immediately and set it aside for mailing. The third D is for diminish. Dispose of everything unnecessary, starting with junk mail and credit card offers. The fourth and final D is due diligence. Once everything is sorted, use a filing system to maintain order. Every day, as you receive mail, sort through it and pay any bills. That's all there is to it [source: Chatzky].
The fundamental principle of keeping your bills organized is to store them in one location and follow a consistent payment schedule. For some, this means paying bills immediately after checking the mail each day. For others, it could be every Tuesday evening before their favorite TV show starts. Just be sure to know your due dates and send your payments at least a week early to ensure they’re processed on time.
If you prefer to pay all your bills online, keep reading to learn how to stay organized with that method too.
By 2003, Americans had accumulated nearly $2 trillion in debt, according to the Federal Reserve. This was an increase of more than 40 percent over the previous five years, not even counting mortgage debt [source: Khan].
Ways to Organize Your Online Bills
In today’s world, you can likely pay all your bills online with a single click. It's convenient and can save you both time and money. However, it's important to stay organized to avoid common mistakes when paying bills online. Staying organized ensures you won’t miss any payments or incur late fees.
The most straightforward way to manage your online bills is to set up automatic payments. If you have the technology, your bills will be paid directly from your bank account every month, minimizing the need to track due dates. Some banks offer online bill pay services where you can manage all your bills from one page. While it takes some effort to set up, once done, you'll have a complete overview of your bills and can pay them all in minutes each month.
If you opt to pay your bills online, many companies provide a paperless billing option. By signing up, you’ll receive all your bills via email, reducing the paper clutter in your mailbox. However, be cautious—create a dedicated folder in your email to store these bills. If one gets lost in your inbox, you might miss it and incur late fees.
Eliminating paper bills can simplify your life in many ways. Not only will it reduce clutter, but it may also streamline the time it takes to pay your bills. Just be sure to note the confirmation number for each online payment. This way, if any issues arise, you’ll have proof that the payment was made, helping to resolve matters faster. It’s also wise to regularly check your statements to track your payments, even if they’re automatically handled.
Keep reading to discover which computer software can help you manage your bills more efficiently.
Believe it or not, it's recommended that you keep your tax returns and all supporting documents for at least seven years [source: Chatzky]. This is the period the IRS has to audit you, and should an audit occur, you’ll need to provide proof for everything you’ve claimed. Make sure to set aside plenty of space in your filing cabinet for these records.
Bill Management Software
Organizing your bills can be significantly easier with the right computer software. However, selecting the right program can be a challenge. Many stores now offer entire sections devoted to financial software that claim to help with managing your bills and finances. The issue is that some programs are too complex for the average user. The best software for organizing your bills should be straightforward and simple to navigate.
Quicken is a popular example of personal finance software that helps you manage all your accounts in one place and even set a budget. It also offers reminders for bill payments. There are four versions available, ranging in price from $59.99 to $149.99. The basic version is sufficient for most users who just need to track their finances. However, if you need to manage investments, a home business, or rental properties, you'll need to purchase a more advanced version [source: Quicken].
Moneydance is another great software option that costs $39.99 and includes features like online banking and bill payments at no extra charge. It's compatible with Mac, Windows, and Linux, making it accessible to a wide audience [source: Moneydance]. In addition to Quicken and Moneydance, there are several free programs available for download that can help you keep track of your bills. It might take a little trial and error to find one that works best for you.
When it’s time to dispose of old bank statements or financial records, never just throw them away. These documents could be used for identity theft. Instead, make sure to shred them or tear them up manually before discarding them [source: Consumer Credit Counseling Service].
