Organizing – Page 9 – Planning with Meg

How to Receive and Manage Your Monthly Bills We are in an interesting time right now with how we receive bills, file and manage monthly bills. Many companies have switched to sending bills online but there are still bills that are sent via snail mail. This raises two interesting questions: Are any bills being missed because they are piling up on the kitchen counter or getting lost on your computer? If you had to review any of your bills again (or maybe even for the first time) would you know where to find them? While the number of bills can seem overwhelming, there are ways to keep the bills organized and paid on time. You just need the right process in place to keep track of all of these bills. Keep reading below to discover some helpful tips on how to keep track of and manage your monthly bills and never overpay or miss paying bills entirely. #1: Paper vs Electronic: Which is Better? Paper Bills I personally still appreciate having a paper copy of my bills to keep me accountable. It seems so much easier to forget about a bill when it’s received online, since there isn’t that physical motion of opening an envelope and noting the due date. Having a paper copy of the bill is beneficial for being able to write details directly onto the bill. This includes how much was paid, by what method, on which date, and the payment confirmation number from your bank. There is something very satisfying about being able to hold the bill in my hands. Electronic Bills Receiving bills electronically saves trees, since the companies don't have to print the bills out and then send them in an envelope. It is quicker to send and receive bills electronically, but they can easily get lost in an e-mail or if you are expected to sign into a website to retrieve your bill from certain companies, you may forget to do this step. There are pro's and con's to both paper bills and electronic bills, so it is really up to you which you prefer. #2: Methods of Tracking Your Bills Having multiple ways to receive bills can complicate things. Not only do you have to know which bills you will be receiving, but you also need to keep track of how you are receiving them. I provided a spreadsheet in my previous post that can be used for keeping track of bills. This spreadsheet would be a good place to keep track of when you are expecting certain bills. Another column could be added to say whether the bill will be received by mail or electronically. All bills, no matter how they are received should be opened immediately and then documented either on a spreadsheet or in a planner by entering the due date, amount due and what company you owe money to. You could even enter this information directly into your cellphone calendar, where you can set up pop-up reminders for when each bill is due, to avoid missing any payments. If you prefer keeping track of bills in a paper planner, one suggestion would be to put the due date as several days before it is actually due to prevent accidentally paying late. If you are anything like me though, you are excited to check your planner every day and wouldn’t miss anything that was written in there! :) #3: Why not pay right away? Some of you may be thinking, why not just pay the bill the day you receive it, so that you don’t miss it? Well, you could do that and there is certainly nothing wrong with doing that. I just like to keep my money as long as I can and most companies allow 30 days to pay them, so I will hold payment until closer to that date. As long as you are paying the bill on or before the due date, you will not get a late payment fee. If the company has offered a discounted price for paying it in 5-10 days, then go ahead and pay within 5-10 days so that you can make use of the savings. #4: How to Store Receipts and Bills to Be Paid For storing paper bills for the month, you could get a nice bin with a lid to put in a common area of your house or you could buy a wall file hanger where you can put the bills to be paid into. If you prefer to have paper copies for all bills, you have the option to print them out (assuming you have a printer). If printed, you should put them with the other paper bills to pay. For bills that you want to keep on your computer, you can create a folder for bills to be paid and separate them by month, so that you can easily keep track of what is due that month. It’s entirely what you are comfortable with. #5: Keep Those Receipts! Any purchases that you have receipts for, make sure you don’t lose the receipts! It’s all too common for people to get a receipt, crumple it up and toss it in the garbage or stick it in their back pocket, where it then goes through the washing machine and dryer and can no longer be read! Sound familiar? :) All receipts can simply go into an envelope and then put into the same bin as the bills to be paid. You could even go as far as separating the receipts into two envelopes and having one for credit card purchases and one for cash/debit card purchases. It is important to keep all receipts so that you can compare your monthly credit card or bank statement with your receipts. If you see a charge that you don’t have a receipt for, and you know you didn’t make that purchase, you have the right to call the bank or credit card company and ask about the charge. Most bills and receipts do not need to be filed long term (more on that in my next post). So don’t feel that you have to file a ton of paperwork forever. It is just a temporary measure to keep everything together and easy to access. #6: After You Have Paid the Bills Once you have paid a bill, write down the payment confirmation number and that it was paid in full (if that is true). Then check it off in your planner or cellphone calendar so that at a quick glance, you can see that the payment is complete. You will need to store the bill for a bit longer though. Since you just paid for that bill (likely through your bank account), that will not show up until the next month’s bank statement. Hold onto the bill until you have that statement to compare against. Once you can check off that it was paid correctly from your bank account, then you can shred the bill. #7: Reviewing Your Bank Statement When you receive your bank statement, you may notice extra charges such as; bank fees, overdraft fees, and any automatic transfers to other accounts, such as an RRSP (Registered Retirement Savings Plan). Those charges should also be tracked on your spreadsheet, so that you know what recurring charges you should be expecting. When transferring to an account such as an RRSP or RESP (Registered Education Savings Plan), you still need to track how much is automatically being transferred each month. The money still belongs to you, but if you forget that you were transferring $100 per month, you may think you have that money to spend, when in fact it is being sent to a savings account, which isn’t as easily accessible. Side note: Any money that you gain from those accounts are not relevant until you take that money out of the account. This doesn't often happen for many years. #8: Reviewing Your Credit Card Statement When you receive your credit card statement for the month, you will want to compare your receipts to the statement. If you used an envelope to store only the credit card receipts, you can go grab that envelope and begin comparing your receipts to the statement. Make sure that all of the charges are on the statement and check if there is anything you weren't expecting. You will only see extra interest charges if you were unable to pay a credit card bill in full at some point. Keep track of the interest charges on your spreadsheet so that you know how much you are being charged each month. The interest can add up quickly if you miss paying your credit card in full! Once you have compared those receipts against your credit card statement and they have all been checked off, then you can shred the receipts. You should keep the credit card statement for another month. Since the payment won’t show up on the bank statement until the next month. Once you confirm that the value you paid was recorded correctly by the bank, you can shred the credit card statement. Conclusion I hope you are feeling less overwhelmed about managing your bills and can now put a better system in place to keep track of them. Knowing how to confirm the details on your credit card statement and bank statement can save you a lot of money. It gives you more control over where your money is going and where possible savings could happen. Don't be afraid to question any charges that seem odd. This is your money and you have every right to question anything that looks suspicious! Have you ever had the bank or credit card company call you to say that there was a suspicious charge? My next post will cover paperwork in general and how long you should keep different forms of paperwork (eg. bills, insurance information, taxes, etc...), as well as what needs to be done with each.