Gaining Control of Your Personal Finances

The bills that keep pouring in throughout the month can be a real problem for anyone and everyone. We all like to use the utilities but wince at the site of the bill. More than the amount, it is usually the timing that annoys us more. Surprisingly, the bills always crop up when there is a temporary shortage of cash. Hence we tend to procrastinate the payment for a later date. Generally, that means that we don’t pay the bill within the deadline and face fines. The bill next month is bigger and looks more depressing and the cycle continues. Fortunately, there are some steps that you can take to break this vicious circle and get better paying your bills.

1. Know Your Bills
   Many people do not know how many bills they pay every month, let alone how much they pay for each bill. This is one of the primary reasons why, you have trouble paying your bill amount. Start to collect your bills at month end and look at them, to know what is your expected expense for paying them. This knowledge is important as it helps you plan to save that much money every month. Intuitively you would keep aside an amount from your income to pay these bills.
2. Align Your Bill Due Dates
   This can be an excellent follow up step to Knowing Your Bills. Once you have an idea of how much to pay and you make the effort to set aside that amount, you must call the individual companies and ask them to re-align the due dates to a suitable common date. This could be the beginning of the month or the end of the month or any other time based on your financial position. This means that you can execute your plan better and pay all the bills together on a single day. It is not difficult to remember a single important date too.
3. Cut into Balances
   Many of your bills would have a minimum payment and the total balance. What you must understand is that any unpaid balance attracts interest. If you have been paying just the minimum payments for a long time, there is a high probability that a major part of your last month’s payment went towards the accrued interest and your effective balance has not changed by much. Make it a point to pay 20-40% more than the minimum payment on every bill. You should see your balance reducing pretty soon.
4. Budget & Plan Expenditure
   With all the basics of bill payment in place, you must start to track your payments and work to bring down the bill costs. Initially, you only need to start by tracking your payments. After getting a command over your bill payment process look to cut costs. Look at all the additional frills that you may have subscribed during the better days that you hardly use today. Knock them off – why pay for something that you don’t use frequently (especially when you are hard pressed to pay the basic bills itself)

Remember that paying you bills on time not only gives you peace of mind, but also helps reduce your overall payable amount and boosts your credit ratings. The benefits are many, so even if it requires some dedicated effort the final results should you egg you on to follow the above mentioned steps.