No one wants to make a late payment, but according to a recent survey, 23% of people shared that they forgot to pay a bill once in the last 12 months. When this happens, late fees are charged. The major reason people forget to pay their bills is a lack of organization. After all, if you don’t know when your bills are due or how much you have to pay, it’ll be difficult to keep track of them all and pay the correct amounts.
If you want to be consistent and pay your bills on time every month, consider using a system to organize your bills. At TiFiPay, we love empowering our users to take control of their personal finances and reach their goals. Learn more about how a late payment impacts your financial life and the top five tips for effectively organizing your bills.
What happens when I pay a bill late?
When you miss a payment, not only do you have to pay a late fee/interest, but your credit score can also be affected. Payments over 30 days late will often be reported to the three major credit bureaus, harming your credit score for up to seven years after the late payment.
Another reason it’s important to pay your bills on time is that a late payment could cause you to pay a higher interest rate if the payment was to a creditor. This higher interest rate will mean you have to spend a lot more money while you try to pay off your outstanding balance.
5 tips for organizing your bills and avoiding late payments
Due to the harm late payments can do to your wallet and credit score, organizing your finances and bills is essential. Learn how to avoid late fees by reviewing our top five tips for organizing your bills below:
1. Consolidate your bills when possible
The average American likely has between 11 to 15 monthly bills, so it’s a no-brainer to see how easy it is to lose track of bills when they’re due. One easy way to better organize your bills is to consolidate them whenever possible.
For example, if you have a different provider for your cable, internet, and phone, you can often switch to a single provider for all three services. This consolidation will make it easier to organize your bills, and you might even save money in a package deal from a provider.
2. Open, review, and log your bills as soon as you get them
If you want to effectively organize your bills, you need to know when they’re due and how much you owe. While it’s tempting to throw an envelope in a drawer or wait a week to check a bill received via email, you should make it a habit to open your bills as soon as they arrive.
After you open the bill, review the amount and record it in your preferred monthly bill organizer. By checking and logging your bills quickly, you’ll have plenty of time to take care of any billing mistakes or update your budget to include increased rates.
3. Organize your bills based on importance
As you organize your bills each month, it’s a good idea to prioritize the most important bills first. For instance, your rent or mortgage expenses are more important than streaming services.
You can also organize expenses based on their late fees and/or interest rates, as it’s a good idea to pay off the bills where you carry a balance and ones with high-interest rates or fees first. By organizing your bills this way, you’ll ensure your necessities are taken care of, and you’ll avoid paying extra fees or interest.
4. Record your bills in one location
While some people prefer recording their bills by hand or using a spreadsheet, these methods can cause you to make errors and pay your bills late. Instead of sticking to error-prone manual processes, using a bill-pay app, like TiFiPay, to record your bills in one location enables you to not miss a payment.
The app automatically logs a bill’s due date and amount after you’ve added it. TifiPay also notifies you when a bill is due and provides a “one-click” payment. With the one click-payment feature, you no longer need to log in to multiple sites to make an online payment, nor do you have to write checks and use stamps to send in a payment.
5. Automate the bills you can and set reminders for bills you can’t
Many businesses and organizations allow you to automate your payments. When you automate your bills, the company will withdraw money from your account or charge your credit card on a set schedule. This automation ensures that you never miss a payment.
If you want to automate your bills, remember that you should still track and check when automated payments occur, as you’ll want to always have the money in the relevant account to cover the bill. For bills you have to pay manually, set reminders on your phone or a bill-pay app to ensure that you remember to pay them on time.
Register for TiFiPay and take your bill-pay management skills to the next level
Now that you know more about how to organize your bills effectively, you might be looking for a bill management app to help. At TiFiPay, we’re ready to help you. All you have to do is sign up for our free bill organizer app. With our app in your corner, you can easily log all your bills in one location, receive reminders about their due dates, and pay them off directly from the app. All these tools help our users never make a late payment again.
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