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Several years ago, I would NEVER pay my bills before the due date. Well, not much more than a day or two, if that much ahead of time. I always felt that paying bills early was like giving them use of my money ahead of time, and I certainly didn’t want to do that-I was smarter than that-and smarter than them, too!
One thing I could not get through my thick skull until recently was part of my problem was that for me, it was too easy to spend money in my checking account if it was there. If I had a bill that was due 10 days after I got paid, and I had money in my account, between the time I got paid and 10 days later, I never thought about that upcoming bill or bills.
In other words, if there was money in my checking account, it was “available” and it was very easy for me to spend it on other things, instead of the bills it was meant for.
I never got myself into too much trouble, but I did get a little behind on some of them and had to scramble to pay them when they were due.
As smart as many of us think we are (and I don’t claim to be that smart), it’s very easy to spend money if it is just sitting in your checking account. I finally realized that by paying my bills as soon as I got them, instead of on the due date, worked a lot better for me than waiting till the last minute.
It allowed me to stop worrying about bills, and I could spend what was left over, without wondering if I could afford it.
I don’t always pay them that early these days, but I am always looking ahead to what is coming up over the next few weeks so I know what needs to be paid out of each paycheck.
Creating a budget can help you manage your cash flow; and as long as you are paying yourself first as well(putting money into savings) it can also can help you avoid :
- Living paycheck to paycheck
- Paying late fees
- Paying disconnect/reconnect fees for utilities or other services or installment payments
- Getting hit with default interest rates on credit cards
It seems rather simple, but a lot of personal finance does, and a lot of people, but of course not everyone, still have trouble with it. I am not sure why that is, but I have a feeling it has to do with habits we have learned.
Do you pay your bills as soon as you get them, or try to get as close as possible to the due date to hold on to your money a little longer? Do you have a reason?
Similar Posts:
- 7 Simple Ways to Save Money on Bills
- How to Simplify Your Finances-Start Small with Automatic Bill Payments
- The Easy Way to Budget for Irregular Expenses Using A Separate Checking Account
- Making Your Hard Earned Dollars Work Harder For You
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Great point. If you wait till the last moment you can really get yourself in a bind. I’ve fallen into this trap as well. Now that I’m clear of that situation I no better than do it again.
I pay mine as soon as I get them. That way I don’t lose the bill and forget about it! It’s also wonderful to never have to worry…all my bills are always paid. I also use a budget and update my spending on the 1st and 15th. This makes it easy to do a quick double check that all the bills have been paid. (I’m a little paranoid!)
@Chris- Thanks! Sounds like you are on the right track.
@Slinky- I do something similar, but I get paid bi-weekly, so lately I have been budgeting 2 weeks at a time-each paycheck-it sounds like a lot more work, but it really isn’t-I’ll post about my biweekly budgeting sometime in the near future.
I’d be interested to see how you budget. I also get paid bi-weekly, but I budget on a monthly basis. It makes a lot more sense to me since the only money I spend on a biweekly basis is groceries. My fiance does his budget biweekly to match his paycheck, and it really does seem like more work. You’re always worrying about when the bill is actually due and if you should pay it this paycheck or next paycheck, and sometimes you have to carry money over from one period to the next. It all sounds unnecessarily complicated and stressful.
@Slinky- I’ve only been doing it about a month, but so far, I just budget for each 2 week period just like I was doing 2 pay periods a month-Whatever bills are due for that 2 week period, I try to pay right away, and whatever is left over is for discretionary spending, debt reduction, and savings. Over the course of a year, it gives me sightly less per check, getting 26 checks instead of 24. I am planning on projecting out over the upcoming year to see if there might be any hiccups. So far it has been easy though-will keep you updated.
I pay my bills as soon as I get them except for my mortgage
I pay most of my bills early at one time in the month.
It gives me piece of mind, I think.
I keep a small calendar to record the due dates of my bills. I try to pay them at least 3-4 days in advance. If there is a problem, I have a few days to try and fix it.
I would love to pay my bills as soon as I get them but, like you, I have the mindset of keeping my money to as long as possible to earn more interest.
@Moneymonk & TStrump-Sounds like you both have a good approach!
@Singleguy- A calendar is a pretty good idea-then you can be sure you don’t forget anything-I think as long as you have a few days cushion, you should be fine.