Every year, consumers collectively pay millions of dollars in late fees because they forget to pay their credit card bills on time. This habit has a domino effect on your overall financial situation; it reduces your credit score, which in turn, increases the rate of interest you will pay on home loans, credit cards, car loans, and other types of credit.
The solution is simple—pay your bills on time and enjoy superior deals on all financial products. However, we know that’s easier said than done. To help you out, here are 7 simple steps so you can make your bill payments on time and never suffer late fees again.
1. Know Your Bills
Step one is to get familiar with all your bills. List them all down in one place—amounts, frequency, and minimum amounts due, ideally in a spreadsheet or an app designed for efficient bill payments. For credit cards, write down interest rates.
Bills commonly include rent, mobile bills, internet bills, streaming subscriptions, gym memberships, credit card bills, mortgage EMIs, etc.
2. List All Due Dates
One of the most important columns to include in your spreadsheet is the payment date. If you find that they are spread too wide, you can also change dates to make your schedule more convenient.
3. Calendar All Payment Dates
Technology is your friend when it comes to payments. Once, you have established all payment dates, add them to your calendar and put reminders. There are a bunch of great apps out here to help you out.
4. Aim for More than the Minimum Amount
The aim of this excercise is not merely to pay the minimum due especially for credit cards. The idea is to also help you live within your means by only buying/ paying for what you can afford. Aim to pay your entire bill, or more than the minimum due on credit cards. In terms of priority, choose the card with the highest interest rate first.
5. Automate as Much as Possible
Manual bookkeeping is a thing of the past; it’s time to automate as many payments as possible. You can set them up both from your bank account and from credit cards, based on what creates more value. If there are any payments that cannot be automated, set multiple reminders. One approach is also to pay all manual payments in one shot, getting rid of the mental pressure as soon as possible to let your automated payment take over.
6. Revisit What You Need
A by-product of streamlining all payments is that you can reassess your utility, subscriptions and plan stack. For instance, you may discover that your internet plan exceeds your needs, or that you’re not really going to gym at all. So, either you start excerising, or stop the membership and consider another approach to fitness.
7. Do Something With Your Savings!
An efficient payment plan is just the start of a new financial journey. One of the biggest perks is that consistent reviews lead to savings. You can channel the leftover cash into a robust investment plan for retirement, and all your other life goals.
Financial planning is a life skill that gets more essential every day. Fortunately, paying your bills on time does not have to be such a hassle. With the right mix of basic strategies and technological assistance, you can get all important payments out the door and live a financially well-planned life.
Want to learn more about how to improve your financial literacy? Reach out to Briteside Solutions today!