Tips to Never Miss a Bill Payment

The best way to never miss a payment is to set up an automatic draft before your billing cycle each month. Of course, this does actually have its own set of drawbacks as well. The main drawback being is that this usually keeps your bills out of mind and out of sight. When we have less focus put on our bills it means that we pay less attention to them and when that happens things tend to fall the cracks and we are much more likely to have budgetary slip up. Having automatic withdrawals makes your budgeting habits much more passive and this is definitely not ideal for all consumers.

The Downsides of Passive Bill Payments

Although they add a great deal of convenience to our lives, there is some downsides to passive bill payments. When most of our bills are paid automatically they often become out of mind and out of sight. When autopay is setup we are less likely to track the bills that are being paid and their respective changes. Your electric bill could increase 120% and you would hardly know it if you had your bill setup on autopay and rarely monitored the changes in usage. Or by the time you do come around to noticing it, it could be too late.

Alternatives to Autopay

A much better financial habit would be to setup a date each month where you go through your income and expenses and perform your monthly task of budgeting. This will help condition yourself to not only have a set time and date to budget each month, but it will also allow you to compare expenses and what you have going out towards your bills each month—month over month. The downside here is that not all your bills will come due at the same time of the month. So, you might want to consider breaking up your budgeting into a few different days over the course of the month.

Envelope Budgeting

Another creative way to make sure you never miss payments is to use the envelope budgeting method! If you get in the habit of enveloping it is extremely rare that you will miss any future payments since you have the physical envelopes of money in your hand. Once you have established your footing with this method it should get easier and easier to consistently stick with it. Cash is king and the method is great for those who love holding cash.

Incremental Payments

Another recommended way to pay your bills is via weekly incremental payments. You don’t need to pay everything incrementally but you will likely want to focus on paying your credit card incrementally so as to consistently maintain a $0 balance. Set aside a set day each week (every Tuesday for example) in which you will use to pay your bills off in increments. This method could actually help benefit your credit score as well, since depending on when your bills get reported to bureaus you are ideally paying everything as you go and will have a lower utilization reported due to this (You can maintain a 0% utilization rate at one point during the month but depending on when your balance is reported that may not necessarily be the case). Moreover, utilization rate accounts for 30% of your credit score, so this method will usually provide a nice boost to your credit worthiness.

Whatever your desired method, there are many different ways with their own positives and negatives in how to pay your bills off each month. Take the approach that best suits your style and make sure you stick to the plan. Once you have a plan in place, try your best to effectively execute it so you can become a bill paying pro.