My wife shared with me this system when we got married and it works great for us. I wish I had used it in my younger days. It works really well.

Basically, the day the bill hits the mailbox, we pay it. We don't wait until it is "due". I write the check that night and it is in the mail the next day. This may not seem like much of a tip but it has worked wonders for us. This is also beneficial if you ever do need a few extra days, you have them. Think how many times you have bought something you didn't need because you had the extra money. If you would have paid your bills early, you wouldn't have had the extra money to make the stupid purchase.

We also contribute up to our employer match in our 401k and then every month, and our deposit into our IRAs is automatically deducted.

I try to keep my checking account balance to an amount that will just pay the bills with no "extra money". We have a money market account as our "emergency fund". We pay for everything we can with our credit card and pay the balance when the statement comes. This will really help you gauge how much you are spending and where. For instance, we learned we were eating out too much so we cut back the next month to our budgeted amount. Just make sure you are paying off the credit card every month.

Great way to manage money... It seems so simple, almost common sense, but it works.

Its exactly what I do. And even with all that cushion there will be close calls, when a statement never gets delivered etc.

I don't like paying bills the day they come in- it's a matter of principle. Even though most bills are monthly, somehow you have only 2 weeks to pay them by the time you get the bill. (And sometimes, such as with cable, you're paying for NEXT month's service.)

Most of my bills are e-bills so I get an e-mail. As soon as that happens I set it up to be paid from my checking account at an appropriate date, and I don't delete the e-mail till I do that. I also enter the amount in the Excel spreadsheet that I have instead of a checkbook. I do the same with paper bills- don't throw them out till payment is set up.

My mortgage is the only one I have set up as a recurring automatic payment.

Whatever keeps you organized is good.

I figure out how much I will need for bills and split it in two. I get paid every two weeks, so the first week I will deduct half of the bill amount from my checkbook register. Then when I get paid again, I add it back in and pay the bills.

I set aside how much I'll need for living expenses for two weeks and leave that in the checking account. Everything else goes into savings. Even though I pay for most of my things with a credit card to get rewards, I still deduct purchases from my checkbook register so I don't go out of control with spending. But if expenses are more than I expected, I can use the cc and have a buffer so I can just take money out of the next check to compensate for the overflow.

We do something similar. Basically we pay the bills as soon as the money hits the checking account. This typically means that bills are paid about 2-3 days after the statement cuts (but before I get them in the mail). There's a couple odd-balls that don't get paid that early, simply because the due dates are different.

I agree, I'm not giving them my interest!

I go about this another way. I have almost everything close on or around the same date each month. At that point, everything must be paid within 15 days. Much easier than having a random stream of bills.

Here's my system:
Day bills on the day they are DUE.



Honestly, the only problem I have ever had with paying bills in not having the $$$ to do so.

That system works, plus you get to Float the credit cards $$$$$$$$$$ for extra days

by paying a bill 10-14 days early would lose me such a minimal amount of interest out of the checking account I pay bills out of, to me, it's almost a non-issue

credit cards that do not have online payment options I'll drop in the mail a day or two after receiving the statement (e.g., JCB, first hawaiin bank, etc).

I do not PAY bills the day I receive them but using Bill Pay I SCHEDULE bills for future payment on the day I receive them.

Usually I schedule them to be paid on my last pay day prior to the due date. That way money is coming in and going out only a couple of times a month.

I schedule bills the day I get them. I always schedule the payment to post at least a few days before the due date.

Only thing I pay the same day I get the bill is the water bill... and that is only because I can't actually schedule the payment in advance and I'd forget

I have the due dates for credit cards and mortgage on my online calendar. It gives me a reminder 10 days before their due. I pay everything that I can online a few days before their due. Some utilities have to be paid by regular mail. Those are taken cared of by DW.

TERRIBLE way to manage money. If a bill comes Jan 1 and is due Jan 25... you should keep your money in the bank as long as possible so YOU get the interest. Paying it in Jan. 2 means you lose out on a good 2 weeks of interest.

I barely have any money in my checking account. and a .25% APY two weeks is not time much to earn...

But multiply that by the number of credit card bills you have x 12 months... year after year... it can turn into something.

I'd rather lose the two weeks' interest than think I already paid the bills and use the money for something else, and not have any money on the 25th to pay that bill.

ETA: I dont' think I get interest on my checking account anyway.

not much...and it would be taxed at >30%

Let's assume I'm paying $1K worth of bills every month, 2 weeks early.
If I left that money in a savings account paying 4.5% instead, over the course of a year, that's equivalent to 24 weeks of additional interest:

$1000 X 4.5% = $45.00
$45/ 52 weeks = $0.87 weekly interest
$0.87 X 24 = $20.88

So I'm losing $20.88. Fair enough. One "late" fee could easily wipe that out. I'm more comfy paying the twenty bucks a year and having my bills paid early.

I waste more than $20.88 every time I fart.

That's exactly what I do, it's necessary just to keep on top of all the bills.

I usually schedule payments just a few days before due date. It leaves me enough time to fix something, if I'm really on top of things.

What is this "check" thing I am reading about?

saladdin

With HYS you can earn way more inteerst

This is exactly what I do. I continue to opt for my paper statements on all my bills, minute statement arrives in the mail I go to my computer and schedule the payment about 3 days before the actual due date. I print that "confirmed scheduled payment" off and staple it to my paper statement and file it away.

This is also great when traveling. You are away but know that your bills are all going to get paid.

Interesting topic. I used to pay my bills early, heck I'd even pay extra on my bill, then every once in a while I wouldn't have a balance (always FELT good to not have a bill)

Now that I have my new Mortgage (NOTE: I have AND sell these, I'm speaking from the HAVE standpoint) I pay everything as late as possible. Using the credit card to float it. This saves me about $20 a month. Not a ton, but why bother handing out my money earlier then I need to. Actually, I prefer if they take the money from a credit card on the due date (that way its never late) and then I get 25-45 (or so) days to float the money....

Scheduling the payments online is really nice. One of my CC's let me do that! I really prefer that one!

I was going to let this go but I can't. This board is all about helping people and for you to make a comment like "terrible way to manage money" is beyond me. I posted this because it has helped me and my family and I thought it could help others. If you are keeping enough money in your checking account to earn enough interest on to amount to anything, then I suggest YOU take another look at how you are managing your funds.

I personally keep my checking account as close to zero as possible so I have funds in my interest bearing accounts. You know, the ones that don't pay you .27% a year. I will keep our way of doing things and my family will prosper. Good Luck!!

By paying a bill as soon as you get it, you don't have to worry about losing it, forgetting about it, or spending the money that was supposed to pay it. That's how I used to roll. We now have a checking account that pays 4.0%, and our savings 5.05%. The interest lost by keeping enough money in our checking account to cover a months worth of bills instead of in our savings is worth the added level of comfort and less hassle with waiting to transfer back and forth between checking and savings. I'm sure all would agree, there's no point in paying a bill at the last minute for a debt that costs you more than you earn (e.g. high rate CC debt), pay it as soon as you have the money. In our situation, I think we are planning to pay things like phone and gas closer to the due date. Hopefully we can Bill Pay those bills so we can schedule them once we get them in the mail.

Another thing that popped into my head: If you have higher interest debt and can schedule a Bill Pay for it, find out when your statement is cut and schedule the payment to be paid the day after it is cut. Since it will be a payment during the next billing cycle, it should fulfill your minimum payment for the following cycle (provided it's large enough), even though you haven't received the bill yet. It's only a couple of days sooner than what OP does, but every little bit helps if it's not too much trouble.

Ditto.

I get paid only once a month, on the last business day. The very first thing I do is pay - or make arrangements to pay - virtually every bill I have, so that with the exception of my car insurance premium and my Amex bill, all payments due are cleared out of my checking account no later than the 7th of the month. What's left is what I have free and clear to play with for the month, and no worries about accidentally forgetting a payment.

As others have mentioned and IMO, paying the bills when they are received is a better policy in terms of organization and keeping ahead of potential mistakes, ESPECIALLY for those who are earlier on in taking back control of their money and haven't yet mastered their discipline.

I think it also fair to say that we have gotten past that point and have created a spreadsheet with due dates and hyperlinks to the payment screen for those bills that can be paid online. We get paid twice a month and have separated our bills into paydates of the 1st and the 15th. We would do them all on the first if we had the option, but the problem is that the individual statement dates often don't allow for that. I would much rather spend one-half an hour or so paying on the 1st of the month and not having to hassle with it the rest.

As for collecting interest, that is good policy and certainly a good frame of mind to adopt, but again, as others have mentioned, the interest accrued is negligeable compared to the peace of mind. Now, saving escrow until the end of the year is a whole other matter.

I felt compelled to answer. I do not pay my bills the day the arrive in my mail box. Of course I live off of Social Security which is once a month so I have to budget. But here are two of my bill examples.

Verizon - My billing cycle ends on the 22nd, they send me a bill about a week later. (usually I get the email saying I can pay before I get the paper bill, but I get that about 6 days later) So, it is now like 2 or 3 days before I get paid, but it isn't DUE till 17th of next month. I pay it in the first week of every month.

Cable Bill - They send it in the beginning of the month, maybe about the 10th of the month. It says it is due on the 28th of the month. I am actually always a "month behind" because I pay it like 2 or 3 days later then the due date. But since I just paid it a week before I am not going to pay it again. I wait and pay it again the next month. I never get a late fee though cause I pay before they print out the next bill. I am gonna catch up on this in the coming weeks.

Now my electric bill is one that is going to drive me crazy. I am on the evened out bill pay system. You know, they take what they think I have used over the last year and divide it by 12. My monthly payment is $50. (Minus approximately .33 to .36 cents for interest on the deposit.) Now they are saying that my actual account balance is a little over $200, but if I overpay the bill by $50 then the next month they actually say that I owe nothing. But my balance would still be $150. Guess I should pay that off and let them send me you owe nothing bill for 4 months? Makes me almost want to go off of it, but my summer bill and a new A/C is going to kill me if I don't stay on it.

I agree.

Also, if you actually pay interest on the credit cards - paying your bill early will lower the total amount of interest you're paying.

Granted, if your c/c is 0% - 2.9% for life, you may want to let it ride w/minimum payments provided you're never late, and using your money for other meaningful goals.

This is what I do also, I pay bills on pay day.

This is what I do.

Can you do this?!?

ETA: I mean I don't have to have an escrow account with my mortgage company? I'm sure it varies, but I was always lead to believe than an escrow account was automatic with a mortgage.

It can definitely be handled by you. If you have 80% LTV or better, call up your mortgage company and request that the escrow be removed. If approved they will send you a check for the balance of the escrow and then you will be responsible for all property taxes from then out.

As was noted a few posts up, it certainly makes sense to pay the bills early that are in the midst of accruing additional finance charges. For those that PIF, though, it comes down to personal preference.

I keep a spreadsheet that contains all of the accounts including those that might only get used every six months or so. Tally columns include balance, due date, minimum due (accounts for teaser BT accounts), date paid and noting that it cleared the bank...

Most of my accounts have an online payment option and I scan the spreadsheet regularly to see what may be coming due in the span of the next four or five days. I'm online with all of my accounts on a regular basis due to the lingering fear of being victimized again, so the scatter-spray of payments is a viable option for me. It works for me and lets me hang onto the little bit of interest I am accruing each month...of course, I have a lot more than just the $1K used in the example that flows out to various issuers each month, so the interest adds up across time.

I agree, this is the way we do it too.

The interest gained by waiting a week or two to pay is a non issue, especially after another rate cut today!

Some places allow you to pay an extra .25% on your rate to get out of escrow.
But this was before the Great Housing Death Spiral.

saladdin

I schedule my property tax bills now the same way as any other bill, using Bill Pay.

All my bills are set up with auto pay from checking. I don't even have to go online and click pay. I love not having to think about paying bills.

wow...all these posts and you are the first one to mention this. good job, i thought i was the only one to realize this. big deal if you are making .25%- 4% on your interest. you are paying 14-28% on your credit card. this is accrued daily. pay your bill as soon as possible

Actually what I do ALL of my utilities and car insurance I pay on my credit card the moment I receive the bill.

Then when I get paid, I just pay off the card (if I have a high interest) or I carry a small balance over some months if it's 0% interest.

Ever since I started my credit repair, I HATE paying bills late. So I make even more of an effort to pay everything off.

I absolutely agree, it really makes no sense to delay paying off your credit card bills, yet so many people are in the habit of doing it.