Paying your bills on time can be easier said than done; in the midst of busy life, a payment due date can come and go with you none the wiser. If you want to get your finances on track, save money, pay off your debts, and improve the overall quality of your life, it’s important to have a system in place so you never have to think about when your bills are due while never missing a due date, either.
Paying your bills on time is crucial to improving or maintaining your credit score and credit reputation. Although points may not be taken off your credit score for the first or occasional missed payment, there are serious consequences to missing a payment due date that you need to be aware of:
╳ You are charged daily interest for every day your payment is late
╳ You are charged a ‘late fee,’ the amount of which varies depending on your credit card institution and if this is your first offence or not
╳ Your annual interest rate may be increased
╳ You tarnish your credit ‘track record,’ or reputation
╳ After repeat offences, your credit score will decrease.
If you miss your credit card’s (or other bills’) payment due date, you should make the necessary payment as soon as you discover your error, and then you should call your card or account carrier and appeal for a refund of the interest rate and late fee charge. Depending on your credit track record/reputation, you may or may not be granted this refund.
For people who have a reliable and consistent paycheck every month, I recommend that you set up recurring automatic payments where you can. But for those (like me) whose cash flow fluctuates every month, or who don’t have set days on which money is received, then it’s important to have a method in place so that you never miss another bill payment–whether it’s credit card, phone, internet, or anything else!
Follow these easy FIVE steps to set up your own system!
1. Sign up for electronic statement notifications
Chances are you’re already signed up for e-statement notifications. Most of the accounts I have don’t even give me a paper option. That being said, if you’re not already signed up for electronic statement notifications, you should do that now.
If you are signed up, you should still go take a look at where your statements are going. For this system, you should choose to receive all statements to the same email account, and it should ideally be the account you consult most often.
2. Create a finance folder or label in your primary email account
Now that you’ve signed up for e-statement notifications, you need some place to put them so they don’t get lost in the incessant flow of incoming messages.
I will show you how I set up my system using Gmail. If you have a different email provider, the terminology will no doubt differ (for example, you may have ‘folders’ instead of ‘labels’), but the principle will be the same.
a. create your label so it is always visible and catches the eye
In Gmail, labels are organized alphabetically, so you can’t easily reorganize them in the order you please.
To make sure that I can always see my label, I made sure to name it in a way that it would appear at the top of the list, and I coloured the label red so it would pop out from the rest of the black text.
I drag and drop my UNREAD statement notifications into my new label/folder, taking them out of the inbox and into their own folder where they won’t get lost.
b. set up automatic filter
If you receive high volumes of emails, it may be a good idea to have your e-statement notifications be automatically sorted into its appropriate label/folder, that way you never accidentally skip over it in the sea of unread emails that is your inbox.
In Gmail, you can set this up under the option “filter messages like these.” This action must be repeated for each bill statement, but once you’ve done it once, your statements will bypass your inbox and go straight to your new label/folder.
Fill in the fields that apply (I leave mine blank), and click ‘create filter.’
Then, you choose what you want to happen with messages from this contact. For me, I choose “skip the inbox’ AND ‘Apply the label: 1. Credit Cards and Other Bills’ AND ‘never send it to Spam’…just in case! Complete the process by clicking ‘create filter.’ Repeat the process for every e-statement notification you receive.
3. Make note of your BILL CYCLE dates (even for non-electronic accounts/bills)
I think of my bills in terms of cycles. The cycle starts when I receive the e-statement notification and ends when the payment is due. I can pay the bill at any point during that time, though I do not recommend leaving the payment until the very last day if you can avoid it.
For example, I received my internet bill notification from Telus on June 12th, and the balance must be paid by July 6th. Therefore, I know that I can pay my internet bill at any time between June 12th and July 6th without any penalty.
I like to know my bill cycle because I have an irregular and inconsistent income stream. When money comes in, I know exactly which bill needs to be paid next.
Knowing the dates of all my bill cycles, I updated my finance folder so each bill’s cycle is written by each account. I do this even for bills that don’t have cycles or online accounts.
For example, I pay my rent straight to my landlord on the last day of the month. Therefore I write ’30th’ beside the bookmark link for “rent” (which is just a random google page, as I don’t have an online rent account). Sometimes the bill is due on the 30th, sometimes the 31st. But, to keep things simple, I just write the earliest day it’s due.
On the same topic, credit card and other subscription payment due days will vary slightly. I recommend that you keep an eye on when the bill is paid, but instead of updating your finance folder every month (which would a pain), just use the earliest date the bill has ever been due.
For example, my Telus bill has been due on the 6th, 7th, and 8th of the month. To keep things simple, I have my bill cycle ending on the 6th in my finance folder. It’s better to pay a bill before the due date. It’s never a good idea to pay it late.
Be aware of that and keep an eye on your payment due dates. Over time, you will learn to know your cycles instinctively and will become less reliant on your finance folder. But at the beginning, the finance folder can be a real lifeline. Instead of logging into your online account every time you want to remember when your bill is due, just open your finance folder and it will tell you right there.
4. Track your UNPAID bills using your finance folder/label
I keep all of my bill notifications unread. By doing so, I can see at a glance, without having to open the label folder, how many bills I still have to pay.
When I have paid the bill, I go into the label folder, and I simply delete the notification. This keeps the folder clean and uncluttered, and I also get a little psychological boost by deleting the email; it’s akin to the satisfactory feeling of accomplishment that comes with crossing items off your to do list.
5. Write all bill dates in your calendar AND daily planner
I have a calendar I keep at the kitchen table on which I keep track of appointments and bills. I consult this every day, so if I see that a bill payment is coming up soon, I can make sure I have the funds ready to pay it.
Of course, you can use a calendar app, if that is what you’re in the habit of checking regularly.
When I have the funds ready to pay the bill, I will schedule a time in my daily planner to go to the bank to deposit the necessary funds (if needed) and to sit down at the computer and pay the bill electronically.
It may seem like overkill to have the bill cycles and due dates located in some many different places (Gmail, finance folder, material calendar, daily planner), but when you consider the consequences of missing a payment, I firmly believe in the adage ‘better safe than sorry.’
Missing a payment due date has very serious consequences when it comes to your credit reputation, credit score, interest rates, and payment amounts. You should take all the necessary precautions to ensure you know when it’s time to pay the bills.
The beauty of this process is that it takes very little time to set up, and once set it, it streamlines the process of reminding you when your bills are due. Now, you just have to know how much to pay each bill cycle. But that’s the topic for another article 😉
Head over to the series masterpost to start the series from the beginning or to find a specific article within the series.