Pay your bills on time
It's all too easy to postpone paying your bills, but the sooner you pay them, the more money you'll save, Hamm writes. The key is developing a standard process for paying your bills.
In this July 2012 file photo, Neta Homier looks over bills in her home in Toledo, Ohio. Hamm recommends developing a system for paying your bills that ensures you consistently do it on time.
Carlos Osorio/AP/File
It seems like such common sense, doesn鈥檛 it?
You get a bill in the mail. It has a due date on it. You make sure to get the payment in the mail before that due date.
Sometimes, though, it鈥檚 not so easy. We forget about it. We miss a bill because money is tight. We lose a bill somewhere.
The late fees hit. The bill grows. If we don鈥檛 pay it quickly, some of the companies might report us to the credit bureaus, damaging our credit score. This causes other bills to grow, like (potentially) our insurance premiums.
Missing a bill costs us money. Keep missing that bill and it will cost a lot more.
There are few things you can do that will help your financial picture more than simply paying all of your bills on time. It helps you out in several different ways, from avoiding late fees to avoiding additional interest, from avoiding collection agencies to avoiding dings to your credit score.
The best course of action is to have a standard process for keeping your bills up to date.
Here鈥檚 how I do it.
Each day, when I get the mail, I put all of the non-junk mail in one basket. I鈥檒l leaf through all of the mail, toss the obvious junk, put aside the magazines, and then put the remaining envelopes into the mail basket.
Once a week (or, at worst, once every other week), I sit down and process everything in the basket. If there鈥檚 a bill in there, I pay it right then using online bill pay. If there鈥檚 some other type of correspondence, I deal with that, too.
This simple process keeps all of the bills paid on time. There鈥檚 not enough of a span between receiving the bill and paying it for anything to become late. I generally just don鈥檛 worry about the due dates because they鈥檙e never close.
This simple routine keeps all of my bills up to date. No late fees. No credit dings. No accrued interest.
What if you can鈥檛 afford to pay them all? If you find that you can鈥檛 pay all of your regular bills, your life is giving you a screaming warning that you should re-evaluate how you鈥檙e doing things.
This post is part of a yearlong series called 鈥�365 Ways to Live Cheap (Revisited),鈥� in which I鈥檓 revisiting the entries from my book 鈥�365 Ways to Live Cheap,鈥� which is available at Amazon and at bookstores everywhere.