Once you learn how to effectively manage your bills, you’ll no longer need to fear your inbox or mailbox. Such a relief.
We all know that sinking feeling when an unexpected bill arrives and throws the monthly budget out the window. It’s tough metaphorically driving around with the fuel lamp flashing, knowing you’ve got nothing left in the tank for an unexpected journey.
The good news is that a bit of basic planning can teach you how to manage your bills to keep your fuel tank topped up nicely. Here are five simple tips to effectively manage your outgoings to help you keep on top of your finances.
1. Include them in your budget
By setting an accurate budget you will understand how much of your income is required to cover bills, and avoid any nasty surprises.
The best way to do this is to take a look at your bank statements from the past year. Check when bills occurred and when – weekly, monthly, quarterly or annual bills. Check for everything: from utilities like gas and electricity, to communications like mobile phones and internet, to insurances like health and car insurance. Factor it all into your household budget.
More on this: 10 killer budgeting strategies
2. Mark bills on your calendar
Make sure bills don’t creep up on you by marking a calendar when each of your bills generally fall due. It sounds simple, but is an effective reminder that will help you stay on top of expenses.
3. Automate as much as possible
Your budget will give you a good understanding of how much money you need to set aside to cover bills each month. It’s a good idea to organise to automatically transfer this amount to a separate “bills” account every time you get paid. This will ensure you know how much is left over to cover regular expenses.
Another option is to arrange for all or some bills to be paid by direct debit on their due date. Note that this method means you’ll need the discipline to leave money in your account to cover the transfers. If you don’t think you can do that, create a separate account.
4. Smooth out any problems with your biller
If you can’t afford to pay a bill by the due date, it’s important to let the biller know as soon as possible. It’s often possible to set up longer-term repayment plans instead of paying the full amount all at once.
Not only can this save some stress, it will also avoid black marks on your credit report.
5. Build an emergency fund
It’s important to learn how to effectively manage your bills and just as important to have money put aside in case your pay packet can’t cover them. Take time to build an emergency fund, so you’re not left empty handed if something unexpected happens.
Yes, that fuel tank might feel particularly low while you’re busy building your stash. But it will feel so good knowing you’ll soon have the means to refuel whenever you need.