Being able to pay your bills on time and in full is a key sign of good money management.
Wondering if you have enough money to cover your bills or realizing you haven’t paid something two weeks after it was due can cause so much anxiety and stress around money.
You can eliminate that stress by taking some simple steps to get your bills organized!
This post will break down how to organize bills and pay them on time each month.
I’ll walk you through why paying your bills on time is important, as well as how to get started setting up an easy bill payment system.
Let’s dive right in!
This post contains affiliate links, including those from Amazon, which means I may make a commission on sales at no additional cost to you. As an Amazon Associate I earn from qualifying purchases. Check out my Disclaimer for more information!
Although I am a CPA by profession, I am not YOUR CPA. All content and information in this post is for informational and educational purposes only, does not constitute accounting, tax, or financial advice and does not establish any kind of CPA or accountant-client relationship.
Why Is It Important to Organize Bills?
I’m assuming if you are reading this article, you know it’s important to get your bills organized and pay them on time, you might just not know how.
But we’ll quickly go through the reasons just in case you aren’t familiar with them!
1. You’ll Pay Your Bills On Time
Putting together an organized system for paying your bills will naturally help you pay them on time.
You don’t want to be constantly paying bills late.
It’s not good for your credit score and it will end up costing you money in late fees.
It might cost you more money later, too, if you ever get a loan for a car or house. Having a lower credit score means you won’t get as good of an interest rate – so your payments will be higher.
Plus, if you forget to pay your bill altogether it might result in your phone or lights getting shut off!
2. Reduce Your Financial Stress
Think about what normally causes you stress when it comes to your finances.
Are you constantly over-drafting your account? Do you realize you haven’t paid a bill and have to scramble to find the money for it?
I’d bet that a lot of it has to do with feeling like you never have enough money to cover everything.
Getting organized and putting together a bill payment system will reduce a lot of this stress because:
- you’ll know exactly when everything is due
- you will know how much money you have in your account
- that all your bills are paid on time.
How To Organize Bills and Pay Them on Time
So, what are the first steps you need to take to organize your bills and pay them on time?
Here are the first two steps I would take.
Know When All Your Bills Are Due
You can’t pay your bills on time if you don’t know when they’re due.
You want to create a list of all the bills you have to pay and their due dates so you can reference it when you’re working on your budget.
Start by making a list of all your bills and the due dates you know off the top of your head.
If you have any bill statements handy you can check those for the due date.
If you are sure you are up to date on paying your bills, you can look at your bank history to make sure you’ve included everything on your list.
Print off your bank statements for the past two months. Then, go through each one and highlight the transactions that are for bills.
This won’t give you the due dates (unless you already have them set up to autopay on the due date), but you can at least be sure you’ve included all your bills on your list.
You can log into your online account or call to get the due date for any you aren’t sure of.
Set Up All Bills to Be PaperLess
Relying on receiving a paper statement in the mail in order to get your bills paid is not a good idea.
What if the bill never shows up? What if it gets lost in the mail and arrives after the due date?
Use your list of bills and due dates as a reference. Log in to each billing account online (or call if you don’t have an online account) and have them set up paperless billing.
This will send an electronic bill to an email address instead of mailing you a paper copy.
Make sure you set them up to go to an email address you have access to and regularly check. Set up a new bill email account if you have to!
This way, you’ll never have to go searching for a missing paper copy of a bill again! You will know exactly where to go to get your bill statements.
Do I need to Keep Copies of Old Bills?
Once you know your bill is paid correctly, you don’t need to keep a copy of it.
That’s just extra paperwork to hold onto that you’ll never need.
I keep the confirmation emails I get for my auto payments for a month or so until I’m sure that everything went through with the payment without an issue.
If you have to pay a bill in a different form than autopay or online, I would hold onto the bill and whatever receipt or confirmation you get that the bill was paid until you are sure that everything went through correctly.
The exception to this is medical bills – you should hold onto those for at least a year after you’ve paid them.
Do I Need to Track My Receipts?
Not specifically bill-related, but people usually ask if they need to keep receipts along with copies of bills.
You don’t need to keep copies of receipts either. (Unless they are for larger things, like home repairs, or are related to insurance claims.)
I don’t even get receipts for most of the things I purchase. I don’t use them to track my spending and I never look at them again, so I decided to stop wasting paper.
If you want more information about what financial documents you should keep and how long you should keep them, check out this article.
How Do I Set Up a Bill paying System?
Establishing a routine for paying your bills can make the process a lot less stressful.
Here are the four steps you should take to get a bill payment system set up.
1. Create a Budget
I know, the dreaded “B” word.
But creating a budget is an essential part of organizing your finances. You can’t pay your bills on time if you aren’t sure you have the money in your account to pay them.
A budget isn’t about restricting your spending – it’s simply creating a plan for how you’re going to spend your money.
Start with the income you have coming in. Make sure you have set aside money for all of your bills before you set aside money for spending.
This post would be a million years long if I also explained in detail how to set up your budget. I highly recommend reading this post about creating your first budget if you’ve never done one before!
Other budgeting posts to check out:
- How to Get Started Budgeting in Excel
- Organize Your Finances with a Printable Budget Binder
- 5 Tips to Help You Stick to Your Budget
2. Organize Your Bank Accounts
One of the best things I ever did to organize my finances was to set up separate checking accounts for bills and spending.
My bill checking is where my direct deposit from work hits and also where all my bills are auto-paid from (we’ll talk about auto payments in a second). All the money to pay my bills (and an extra $200 as a buffer) stays in this account.
Whenever I get paid, I transfer the money I budgeted as my spending money for things like groceries, pet supplies, gas for my car, etc. to the spending checking account. (I also keep a buffer of about $50 in this account.)
I have a separate debit card for the spending account so I am never accidentally spending my bill money when I’m out shopping.
Even when you have a budget, sometimes things can get off track. This way, you can be sure you have the money in your account to pay your bills as long as you haven’t been using the debit card for your bill account.
3. Automate Your Bill Payments
One of the easiest ways to make sure your bills are paid on time is to set up automatic payments.
This will have the money automatically come out of your account to pay the billing company on the due date.
No more worrying that you didn’t pay something on time!
You can’t just set auto payments and forget them, though.
Make sure to keep up with your budget to be sure there is enough money in your account to cover the bill.
Also – make sure you set up auto payments through the billing company, not your bank!
If you set it up with your bank and something happens to cause the payment to not go through, the billing company doesn’t care. The payment will still be late.
If something happens and it’s because of the billing company’s system, though, they usually won’t hold it against you.
Not all companies have an auto payment feature on their online platforms so for some of them you might have no choice but to do autopayments through the bank. But if at all possible, go through the billing company.
4. Set Up A Bill Payment Tracker
The last step is the easiest once you completed the first three!
Print off a bill payment tracker and put it on your refrigerator, budget binder, or somewhere else you’ll see it often.
Use your list of bills we created earlier to fill out the tracker.
All you have to do now is check your bank account throughout the month to be sure the payments are coming out of your account correctly.
I like to log in to my bank account once a week. I make sure any bills that were supposed to be paid that week came out of my account and that the amount seems correct.
When you see that a bill was paid correctly, just check it off under the current month on your tracker. If you don’t see it – do some investigating into what happened. It still needs to be paid!
At the end of the month, you can check your tracker and make sure everything was paid.
And that’s the last step! Super simple once you’ve done the first three.
Conclusion
Follow these steps and you’ll be set up to make sure your bills are paid on time every single month.
Now that you know why it’s important to pay your bills on time, what you need to do to get your bills organized, and how to set up a bill paying system, it’s time for you to make it happen!
Set aside sometime this weekend to get your system set up. You’ll be glad you did!
If you have any questions make sure to leave them in the comments below.
Make sure to check out these other articles about money management I think you’ll like:
- The Complete Guide to Writing Your First Budget
- The Ultimate Guide to Budgeting in Excel
- 7 Tips to Save Money on Groceries
- Get Your Finances on Track With a Printable Budget Planner
