Paying your bills is probably your least favorite money management chore. That’s how I used to feel too – until I started using some of these tips – and now I actually save money and enjoy paying my bills. I know what you’re thinking. Is it possible to actually save money while paying your bills? Absolutely! And not only that, by implementing a few of these tips, you will save yourself time and stress as well. Here’s how:
Pay your bills on time. There are lots of reasons many people don’t pay their bills on time; lack of organization, not budgeting money well, misplacing bills and even procrastination. But when a bill isn’t paid on time, it can cost you a lot of extra money in unwanted fees and late charges. This strategy is probably the single easiest way to save money on your bills. You can avoid pricey fees, higher interest rates and negative dings against your credit report. So pay your bills on time as much as possible!
Sign up for online bill pay. Everything is going mobile these days, and banks are no different. In fact a lot of banks and financial institutions prefer for you to pay your bills online because it’s more secure and convenient for them as well. Online bill pay is an essential strategy when paying your bills. Here’s why:
- Safer than mailing a paper check
- More convenient and faster
- Helps remind you to pay on time – which avoid fees
- Saves you money by not purchasing checks, stamp and envelopes
- Most banks offer this feature for Free
- Access to online records and payments history
Enroll in automatic payments. Another great way to save yourself both time and money, is by enrolling in automatic payments. Most companies provide the option to pay automatically using your debit or credit card. Basically you can “set it and forget it” since your payment will be automatically deducted from your account on the same date of every month. This will ensure your bill is never paid late and help you build up a solid credit payment history.
Consider pre-paying your bills. This concept may seem a bit odd, but pre-paying your bills (or paying more than your monthly balance) is an excellent way to cut down the amount of interest you pay on loans and other debts. This will also help you pay down your debt faster, which will move you towards becoming more financially stable in the long-term. There are many benefits to pre-paying your bills; like getting a yearly discounted rate and building up a short-term cushion in case of a small financial emergency.
Pay off the highest interest rate first. This seems like common sense, but many people don’t realize how beneficial paying off the highest interest rate first can be. Having a higher interest rate means more of your money going into the bank’s pocket instead of towards the principal balance on your loan, which means you will be in debt longer. Set up your bills to pay down the highest interest rate card or loan first, then tackle the other bills with a vengeance.
Take advantage of promotional offers. This option needs to be used wisely, in conjunction with a solid debt-repayment strategy. None the less, it’s very effective when put to good use. Promotional offers like balance transfers, 90 days same as cash and super low interest rates, are smart strategies that can be used to your advantage. I used balance transfers as part of my pay down debt plan on my high interest rate credit cards, and took advantage of the 0% interest rate.
Make extra payments when you can. Anytime you get a small windfall of money, like an income tax refund or bonus at work, consider using the extra funds to pay more on your bills. Similar to the pre-paying your bills tip we discussed earlier, this strategy can help streamline your payment process, and ensure that none of your bills become late. Extra payments will also save you money on interest, which helps decrease the amount you owe on your debts thereby increasing your net worth!
Pay your bills more frequently. This option is great if you aren’t able to find any extra money laying around to pay on your bills. Split your payments in half, then pay them twice a month instead of the normal once a month payment. Again, this helps you make a good dent in building up your equity and net worth. This is one of the best strategies to help you become debt free faster and save money on interest.
Negotiate for a lower balance or interest rate. Many of your bills are actually negotiable, and if nothing else you can at least negotiate a small discount or ask them to extend the payment date. The best way to approach the situation – and ensure your request gets heard, is to be as nice as possible. But don’t give up too easily, keep asking for help until someone hears your case. It never hurts to ask, and since the voice on the other end is a person too, many times they want to help you.
Consolidate your bills and other debt. The basic strategy of consolidating your bills, is to simplify your debts into one loan with one payment. You can often get a better single interest rate, and a lower payment than having multiple loans and multiple interest rates. This in turn, helps you pay off your loans faster, which saves you money in the long run. However, this method gets tricky if you aren’t careful, so be sure to educate yourself on all the fees and costs associated with debt consolidation.
With a few small changes you could actually make your bill paying process easier and more fun. You will be able to save yourself time, money and simplify your finances which leads to better habits. Better bill paying habits, leads to better money management which leads to a bigger bank balance. All of which are the stepping stones to becoming financially secure.
Image credit: vgstudio