Paying your bills each month is usually not a fun experience. But what if I told you there’s a way to turn your least favorite money management chore into something you actually enjoy?
The following strategies below offer extra incentives for paying your bills while making your money work for you as much as possible. Here are seven ways you can improve your approach to bill pay so can actually save you money in the long-run.
1. Sign-up for automatic bill pay
Most bill providers allow customers to enroll in automatic payments to ensure bills are paid on time. Not only does having your payments automatically deducted from your checking account or credit card save you time, but it can also save you money.
For example, Chase offers their customers an additional reduced interest rate of 0.5 percent on auto loan payments when enrolled in automatic payments from their Chase checking account. That small percent of savings can really add up over the lifetime of a three- or four-year car loan.
2. Use bill payment reminders
As our schedules become busier, it becomes increasingly difficult to remember important dates on our own. This is when bill payment reminders can come in very handy.
Bill payment reminders will alert you via email or text message within a few days of your bill’s due date.
By signing up for these free alerts, you can avoid late fees and charges for past due payments. This also helps improve your credit score by not showing any late accounts on your report.
3. Pay your bills more frequently
If you want to really reduce your debt load quickly, and save money on interest at the same time, consider paying your bills more frequently.
You can split your monthly payments in half, or pay them at the end of every week. The goal is to match up the bill payments to your paycheck schedule.
The only thing to watch out for is any fees that may be associated with paying your bills more often. Some banks will penalize customers for following this strategy as a way of simplifying their accounting process.
Make sure you check the terms and conditions attached to you bill pay accounts first, then proceed accordingly.
4. Check out online bill pay
Most banks and businesses are going digital these days. In fact, many financial institutions offer free online bill pay to their customers.
Here are some of the main benefits for using online bill pay to pay your monthly bills.
- Your payment history is in one secure location.
- You build a positive credit history.
- It’s more secure than writing a paper check.
- You save time, and it’s more convenient.
- It’s usually a completely free feature.
- You save money on checks, envelopes, and stamps.
All of this wrapped up together helps eliminate headaches often attached to the bill payment process. Not to mention gives you back some time and money, too.
5. Negotiate for better prices
A year after moving across the country to our new home in Denver, Colorado my husband and I noticed that the promotional plan on our internet bill expired.
This meant we would have to start paying a rate of $103 instead of $72 per month. That’s a $31 per month increase for the exact same service.
To avoid this price hike, we called up customer service and asked that the promotion be extended since we had been such good customers and planned on using their service. They agreed and renewed our internet plan at $72 per month for another year. Score!
When it comes to bill companies, they would rather offer you a lower bill than lose you as a customer, so don’t be afraid to negotiate for a better rate.
6. Consider pre-paying your bills
Sometimes it’s hard to budget water or electricity bills because they depend on utility usage, which can vary each month.
However, depending on the seasons of the year, you may be able to figure out how to pre-pay these bills.
To find the correct amount you can pre-pay, take the average of a specific bill, look at the past year’s statements and divide the amount by 12 months. This will ensure you don’t underpay your bill and have to pay a late fee.
With this strategy, you can build up a short-term cushion in case you have a lean month. Or, potentially getting a yearly discount from the utility company thanks to prepayment. Check with your utility provider to see if this strategy is worth implementing!
7. Earn cash back rewards
While earning cash back rewards may not save you money, it can help you get the most out of your bill paying process. Log into each one of your online bill accounts and update the payment method from your bank account to a credit card that offers cash back rewards.
Depending on your credit card reward terms you may earn an additional one to two percent cash back on each bill you pay. Then at the end of every month, you only have to make one payment to your credit card account to cover that month’s bills.
What’s more, you’re earning rewards on bills you would be paying anyway, so there’s little risk of going into debt.
Paying bills on time will make your life a lot easier
The most important strategy to saving money while paying your bills is not to skip or miss payment deadlines.
There are many reasons that can derail us from paying bills on time, from lack or organization to misplacing bills as they come in the mail. However, it’s important to create systems that help you stay organized and remind you to make payments on time, every time.
By paying bills on time, you’ll be able to avoid late fees, higher interest rates, and negative effects on your credit report.
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