Paying your bills on time is extremely important because fines can range from mild to very severe. This means that you may be charged a late fee, your service may be suspended, or in the worst case your account may be closed and related products or services may be removed entirely. Keep money in multiple checking accounts at the same bank or at different banks so you don’t have late or missing bill payments. Group bills by importance so critical bills like mortgages are kept separate from less important expenses like recreation. This ensures that you have peace of mind when you fall behind on payments or experience a cash shortage.
Set bill payment priority
Contribute monthly payments for multiple services and products you need. However, some are more important than others. Give them a higher priority when you set aside money each month. Some examples of critical or high priority bills are your rent / mortgage, auto insurance, health insurance, electric service, and the Internet. Additionally, you may also want to include money for home maintenance or repairs. On the other hand, non-critical services are those you still need but can live without for a month or two or spend less money for. Mark them as lower priority invoices and allocate funds last. Some examples of overhead are groceries, clothing and shoes, recreation supplies, entertainment such as concerts and music, and cable service. Remember to include the online services you use, such as Netflix or Hulu Plus for entertainment, Pandora One for music, and Amazon Prime to shop and ship your purchases.
Use multiple checking accounts
After setting your bill payment priority, you can decide to open another checking account at your bank or go to another bank. Assign one for critical and the other for low priority. Transfer money to the most important account first. Then you would transfer the remaining funds to the low priority account. Arrange to pay bills from the bank or directly at each service provider.
Record the due date of each invoice and verify that you have sufficient funds to cover the most important ones. Check and update your budget after paying each invoice. If you fall short on cash or experience a pay cut, then you would still have paid essential bills first. Therefore, you would still have the peace of mind of knowing that you met your basic needs.
Avoiding late or missing bill payments is important to keep your services connected and peace of mind. Maintain multiple checking accounts and assign one for high priority bills and the other for low priority bills so you can manage your payments much more easily. Transfer your salary to the most important account so that you pay for those services on time, even if you experience a salary cut or deficit due to unforeseen circumstances. Then you would pay the other bills with the remaining cash. Those are the ones you can live without for a few months or don’t mind experiencing a reduction in service.