Paying Bills: Get Organized
Whether you’re looking for an alternative to bankruptcy or just trying to get your finances in order, you could likely benefit from some basic organization strategies.
For many people, the sheer number of bills arriving in the mail can be enough to create a sense of chaos or panic.
Check out some tips for making your financial obligations seem less daunting.
Read on for more debt information and fill out the below form to talk to a sponsoring bankruptcy lawyer about your debt-relief options.
Get Started with Debt Relief
Before you develop a “system” for keeping track and staying on top of your bills, you may want to prioritize your debts so you have an idea of how much paying (or not paying) each one will impact your life. Here are some suggested tips for organizing your debts- but remember, this is not legal advice. Consider talking to a bankruptcy lawyer about debt priorities and strategies.
For the most part, funnel your money into the essentials first and worry about the frills later. Here's an unofficial breakdown:
Necessities like food, medicine and shelter come first. If you don’t have anything to eat or anywhere to live, the rest of your problems really don’t matter. Make sure you can eat and you’re making rent or mortgage payments.
Essential utilities, including water, heat and electricity come next. Fancy TV packages, Internet connections and the like can be dropped, but you need running water and heat.
Transportation, whether it’s in the form of car payments or bus fare, is essential for most people. Without wheels, you likely can’t work. So, downsize or opt for public transportation if your vehicle is too costly.
Child or spousal support should rank fairly high on this list, as you can be sent to jail for failing to pay.
Tax payments, especially if the government plans to seize your property or income in exchange for taxes owed, come next.
Student loans fall further down the list, especially if no collection action has been made or threatened.
Unsecured loans like credit cards, bills for services, loans from friends, etc. should be at the bottom of your list of priorities. Because these debts are not linked to property, lenders cannot seize anything for failure to pay. Plus, if you end up filing for bankruptcy, they may be discharged by the court.
Developing a System
Once you have an idea of how to prioritize your funds, work out a system for making sure your bills get paid every month.
No one system works for everyone, successful systems should be fairly simple and convenient for you. If you design anything that’s too complicated or too difficult to adhere to, your chances of sticking with it diminish.
Here are some methods to consider when developing your method for organizing and paying your bills:
Color-Coded Folders
Buy folders of various colors and use them to help you sort and store your bill-related papers.
Consider labels like “Unpaid Bills,” “Receipts,” “Paid Bills,” etc. Every time you get a bill or receipt, put it in its folder.
Then, when it’s time to sit down and take care of finances, you’ll have everything in one spot.
Electronic Reminders and Storage
These days, you can go paperless for most bills.
Consider setting up an alert on your cell phone or computer that will remind you once a month (or whenever your bills are due) to start writing checks or transferring funds electronically.
You may even want to make a spreadsheet of current accounts, balances and looming deadlines so you can have all your information in one place.
The Buddy System
Enlist a friend or family member to check in on you when bill deadlines are approaching.
You may find it’s a lot harder to lie to Grandma that you’ve paid your bills than it is to ignore a payment for a month or two.
Online Automatic Payment
Some banks allow you to set up automatic monthly payments on various accounts. This can be useful if you’re not worried about having funds in your account when payments are due, but could backfire if your account balance is erratic and you risk racking up penalties for going into the red.
No matter what system you choose or develop, one of the most important elements of staying on top of your bills is consistency.
Dropping bills wherever they land can lead to stress – trying to remember where you put them, whether you got them all, when they’re all due. Sometimes, simply having a “bills basket” can eliminate the stress and dread associated with paying bills.
And, if you’re interested in cutting back in some areas of your life to allow you to make bill payments more readily, you can check out our pages on reducing your spending and developing a budget.
You may want to combine your new financial organization with another
strategy for eliminating debt and/or avoiding bankruptcy. If so, you
may find the following pages useful:
Remember: you can take control of your finances.
The above summary is by no means all-inclusive and is not legal advice. For the latest information on this topic, please contact a bankruptcy lawyer in your area.