How Do You Organize and Pay Your Bills? - Live Like a Mensch
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How Do You Organize and Pay Your Bills?

Recently, a friend posted the following question to the folks at large on Facebook:

How do you manage your bills? I don't mean how do you make sure you earn enough money, per se, but I am curious what processes are out there to file, organize and pay bills on time. Do you do it on a certain day per week? Do you still write checks or use online banking? Do you do it once a month? What about saving files? Electronically? Hard copies? How do you manage all the *** paperwork and bills that come your way? Any words of wisdom for us on the topic?

This, of course, made me realized that I had never outlined my particular bill-paying/organization strategy here on Mensch. I suspect I have a particularly convoluted process for bill paying, since that's how I roll, but I thought I'd explain both how I handle our bill-paying and our paperwork-filing, since it does take up a reasonable portion of my time. (About an hour a week, total.) Here's how I responded to my friend:

I think paying bills has become much more complicated now that we have online payment options than it was when everything was paper based. Then, it was easier to organize everything in the same place and write a calendar reminder for when to pay bills. Now, most people have a hybrid system because they still have to write a few paper checks but handle many of their bills online or automatically. It makes it much more difficult to get organized, in my humble opinion.

Here's what we do. 

I have a bill-paying day around the 25th or so of the month, when I try to handle all of the monthly bills that are regular--utilities, credit card, etc.

Some of those bills are paper and some are online, but I take care of all of them at once. 

However, I also go through the mail once a week (we basically let it pile up through the week in our inbasket, and I clean it out/shred/recycle/file things on Saturdays). That's when I take care of irregular bills (usually medical copays that weren't paid at the time of service, but also any other bills we might get from home repair service providers, for example).

Saturdays are also when I gather together those once-monthly bills and attach them to my "everything" clipboard where I keep my daily docket and other important papers that I will need to deal with before/rather than filing. 

Once I pay a bill, either an irregular one or a monthly bill, I file the bill in our filing cabinet. I didn't used to do this, but now that I work from home, several of our bills can be considered tax-deductible, so I'm trying to keep careful track of everything.

For paper bills, I write PAID and the date on it. For online bills, I just print out the receipt for payment (the date is usually already on there). I have set up a filing system *somewhat* based on what David Allen suggests in the book Getting Things Done. Each item has a hanging folder in our filing cabinet, and I just place everything that needs to be filed in the appropriate hanging folder.

I also have a folder that I purchased specifically for tax documents, with tabs for business & job related expenses (where utility bills, as well as receipts for books that I buy for research, etc., go), childcare expenses, income (which I have to keep careful track of as a freelancer), medical expenses, vehicle registration fees, etc.

Most of my bills end up being filed somewhere in that tax folder, although some (I'm thinking of home improvement stuff) goes into a related hanging folder in the filing cabinet. 

To boil it all down, basically, I "deal" with bills about once a week, and I have a specific day to pay bills once a month. We do have several bills that are automatically deducted, which I account for on my monthly bill-paying day. I also balance my checkbook at least once a week, which helps with determining if I need to wait to pay a bill. Handling things this way means that I am always on top of the financial side of bill paying (never a "doh! I have to wait for that paycheck to pay this bill, and then I'll be making a late payment!"). It also gives me the structure to make sure I don't miss important paperwork.

All that being said, I've realized over the last couple of years that good organization and finances really comes down to consistency. This system works for me because I can do it consistently. I like it, which makes consistency easy. No system that asks you to do something that sounds about as fun as a root canal to you is going to work, no matter how perfectly organized that system might be. So if you can figure out something that works for you to make bill-paying more pleasant in some way so that you can consistently keep with the same system is what's going to work best for you.

So this is what I do, and it's a system I've cultivated and tweaked over about 15 years of being a bill-paying grownup. How do you handle your bills and paperwork organization? I know many people swear by Mint, Quicken, and the like, although I cannot imagine giving up my paper check register. I suspect there is a less paper-intensive way for me to hold onto all of my important paperwork/bills/etc, but I for one can't think of one that's also less labor-intensive.

So, gentle readers, will you weigh in with your bill-paying strategy?



frugal_fun said:

I've used Quicken for years, although I've finally gotten around to using it as it should be used by printing out the reports. (There's no point in logging financial transactions in a database if you don't use the info, even if to just reconcile the data.)  

I have 2 sets of reports that I print out - one weekly, one quarterly. It easily lets me know what we are spending where. Recently we realized our grocery bill was our personal money black hole. We've been making adjustments and I'm happy to say that's gone down by quite a bit.

I did paper check writing for years. My frugal nature finally got the better of me and the last time I switched banks we got signed up for bill pay. Now I pay a bill the day it comes because it's literally a 2 minute process. "Bill paying" day is more of a print the report, do odd financial jobs day.

I do keep paper bills "turned on" because it's a "fail-safe" if anything happens to me. At least hubby can see the physical mail piling up but he'll never see email bills piling up.

July 17, 2013 7:53 PM

haverwench said:

I pretty much pay bills when they arrive. Most of mine are now delivered in electronic form to my inbox, so I just mark them "urgent" so that they don't get lost, and then in the evening (or during a work break) I (1) go to the company's website to download a copy of the bill, (2) go to my bank's website to pay it, (3) enter the payment in my check register, and (4) write it down on our monthly expense log. Yes, this is a weird hybrid of paper and electronic, but because I'm used to it, it only takes a couple of minutes. The only bill I still pay by check is my quarterly water/sewer bill, because the borough doesn't accept online payments. So I just arrange my next regular daily walk to take me past borough hall, stop by the window for the water department, and write out a check.

I don't have Quicken or any kind of program specifically devoted to finances, but I do have a budget spreadsheet in Excel. At the end of each month, I add a new column for that month to the "Expenses" page and enter all the amounts from that month's paper tally sheet. Excel automatically totals them up so that I can see how much I spent in each category and how it compares to my spending for previous months. I also have a separate page where I keep track of spending in each category for the whole year, so I can monitor how it goes up or down. I realize Quicken would probably make the whole process easier, but I'm just not sure it would save me enough time to offset the cost of the software and the time required to learn it.

July 21, 2013 3:37 PM

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