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?