Successfully accumulating wealth often means paying attention to the little ways in which we can save money in life. One way many people squander cash is by paying late fees and interest on bills that are overdue. Although the dollars may seem small, the charges add up to significant amounts over time.
Consider that the late fee for monthly bills is often $30. Over the course of a year, that’s $360, but over a 10-year period, that’s a whopping $3,600. Consider what even a simple investment of the funds could produce in 10 years.
In addition, late payments erode your credit report. To get the best deals on mortgages and other programs based on solid credit, you’ll need to be sure to keep your credit score high.
So let’s get to work with six tips to help you be sure you are always paying your bills on time.
Create a Positive Mental State
Many people defer bill paying, as the process creates negative feelings, and so they procrastinate. They have buyer’s remorse for some unnecessary purchase or they become depressed that something had to be purchased on credit rather than in cash.
When it’s time to pay bills, stop and create rational thoughts about the bill. That frivolous purchase may have gotten you into the good graces of a friend or family member. Or the new suit may have gotten you a job interview for a prestigious new career. Think of as many positive statements as you can about the use of the product or service for which the money is owed, or vow to see the purchase as a learning experience for the future.
Also, view paying your bills as a positive step toward accumulating wealth. Imagine that when you are avoiding late fees, that money is going into savings. Better yet, reward yourself and set up a savings account to actually put the saved late fees aside. Visualize how your new on-time bill-paying program is going to get you to the next level of wealth creation. Picture yourself in the situations that wealth bring such as exotic vacations. By creating a positive attitude towards bill paying, there is now no reason to delay getting those payments in on time.
Pull Bills Out of the Mail Everyday
If you get lots of snail mail, it’s very easy to have mail pile up with bills accumulated among the pieces of junk mail, catalogs, and other less necessary communication. Sort through your mail religiously each day, and pull out all the bills that have arrived.
Increasingly, vendors and credit card companies are sending bills via email. When you read through the day’s emails, be sure to separate out the bills. Don’t ignore them or skip over because you know what they are.
Organize, Organize, Organize
Whether you have paper or electronic bills, be sure to organize them to make the bill-paying process seamless. It’s easy to get frustrated when bill paying comes around, and it’s a big production because you can’t find things.
For paper bills, keep an organization space with bills and statements that need paying. Some office or closet supply stores carry bins just for this purpose. Some clever designs have dividers by date of the month so that you can see at a glance what’s due when. Be sure the bill-paying station is in an easy-access area, not a closet that you can close and forget about.
For bills you receive electronically, create a separate Inbox. In most online mail programs, you can easily direct emails from certain senders to specific places. Just be sure that the Bills Inbox is visible and easy to access. This way, your bills won’t be scattered throughout your email and difficult to find when bill-paying day rolls around.
If you receive a mix of paper and electronic bills, you might also consider printing out the email bills to have everything in one place. While not as green as using an eBill, the point is to get your bills paid on time. The few cents of paper may be worth it to keep you organized.
Keep a Calendar
With so much going on in the world today, it’s easy to let a bill due date slip out of our overloaded brains. Add bill due dates to your calendar. If you keep a paper calendar, write out the due dates there. Electronic platforms like computers, Smartphones, and tablets all have calendar features that remind us of appointments or due dates for tasks.
When you get a bill, immediately plug the due date into your task calendar and be sure the reminder request is turned on. Upgrading to a Smartphone may actually pay for itself with the savings you accumulate by avoiding late fees!
Automated Bill Pay
Of course, one of the easiest ways to stay on top of bills is to set up automated bill paying through your bank’s online banking system. Enter each bill as it comes in for automated payment a few days before the due date. Repetitive amounts like car payments can also be scheduled, and you don’t even have to think about them.
A Note for Business Bills
If you are a sole proprietor with a home business, don’t fall into the trap of seeing late fees as a business expense. While fees are to some degree tax deductible on your federal and state business tax returns, it does not mean the entire amount is returned to you! Solid business financials show profitability from reduced expenses, and that includes fewer late fees and lower interest payments.
Following these six simple tips will soon have you in the routine of paying your bills on time and on the path to real wealth creation!
Sarah Boisvert is a writer who covers a wide range of topics, especially in business, travel, and the arts. She has specific experience in business management, marketing, and sales. Her work includes profiles of Billfloat, Apple Computer, and 3D Systems Corporation.