We all have bills and we all have to pay them. However, when it comes to personal finances and budgets, some people pay their bills this way:
1. Get a statement (in the mail, like snail mail).
2. Avoid statements (“Ack! A bill! I’m stressed about money!”)
3. Two weeks later, remember that statement (“oh &$*%! I have to pay this or I’ll lose (fill in the blank) service!”)
4. Write the check and send it to the service provider (and pay almost 50 cents to send it).
Sometimes this happens:
5. Forget the check, spend money that was reserved for the invoice, check bounces.
6. Never got to step 3 and service is cut off and pay bill madness occurs.
YIKES. If you’re stressed about money and bills, there are only two things to do: TAKE RESPONSIBILITY and AUTOMATE IT.
Paying your bills in this ‘old school’ way is stressful and is what is putting you in a financial hole. You are human. Humans are unreliable. We forget, we create reasons, we are impulsive, we choose ‘want’ over ‘need’. It’s our biological nature, so don’t be offended.
So what is that-person-you-know-who-has-control-over-their-finances doing that you don’t?!?! I mean, they’re human too, right?
RESPONSIBILITY and AUTOMATION.
They have been responsible with their bills and have set up a system that manages their finances for them. They’ve taken themselves out of the equation so they can’t mess it up! If you do the same, you’ll find that you’re less stressed and have more control over your finances.
Take the following steps today to get your finances in order. Old school is not COOL when it comes to your bank account.
1) You must be responsible with your finances and if you don’t know how much TOTAL you need to cover your bills (this includes RENT) each month, you must find out this number, NOW. If you find that your bills leave little for necessities like food, you may need to reassess your income/expenses and downsize on utilities (or get a second job, but who wants to do that? Work hard enough).
2) Whatever this number is, have your employer automatically deduct it from your paycheck and put it in a separate account. If you are self-employed, ask your bank to withdraw this amount on certain dates and deposit it in a separate account. Block the option to withdraw from this ‘bills’ account with your debit card.
3) Make every ‘mail statement’ an electronic statement. 99% of services offer this option. It will come straight to your inbox and save trees.
4) ALL banks and ALL services offer automatic payments. Most landlords (if you’re still renting, which is another way to waste money by the way) also allow electronic payments. Set up automatic bill payment through your bank or set up with each service provider. If you pay automatically with your service providers, I recommend setting them up by bank account/routing number and not by debit card number. That way, if you lose your debit card, you won’t have to go to every service and update them all.
5) Live without stress. No more ‘bill reminders’, no more last minute hassles. No late payment fees. Trust me, you’ll soon get used to only having access to a dedicated spending amount. You will have made your finances ‘fool proof’ or rather IT proof.
Your credit score will thank you.
Want a video version of this article? Go to: http://www.youtube.com/watch?v=ntgKondiQTY.