According to The BBC, household debt in the UK has risen to an unprecedented £13,000, and much of this problem is caused by poor budgeting and a failure to keep tabs on incomings and outgoings. Many people spend beyond their means because they haven’t yet worked out the best way to keep track of bills, and a surprising number even have no idea how much they regularly spend, so it’s no wonder that debt is on the rise. Although getting to grips with your finances may not be a fun task, it is something that you really need to do if you want to stand the best possible chance of staying in the black and not owing your credit card company a fortune.
There are many ways in which households can learn to control their finances more effectively, and a large part of that involves learning the best way to keep track of bills. If you don’t know how much you pay, let alone when you need to pay it, you can’t be sure that you’re getting the best deal for you. The key to cutting your debt is to find the cheapest utility and service providers for your circumstances, and to do that, you need to know how much your monthly bills are in the first place.
If you’re disorganised when it comes to your bill management, you will probably end up missing some key payments, which may land you with extra late payment charges or even worse, a CCJ. Alternatively, you may actually make over-payments because you can’t remember which accounts you’ve settled and which ones remain outstanding. The solution is to set up a system so that you know the exact amounts that you need to pay out and the precise dates by which those payments need to be made.
Keep Your Bills Together
The first step in tracking your bills is to make sure that you keep them all in one convenient location. Now, this may be easier said than done since many of us now receive both paper and digital bills, so the key is either to set up two storage spots, one virtual on your computer and one physical in a handy spot in your home, or, if that’s too confusing, to print out all of your e-bills and store them all in the same place.
When choosing a place to corral your bills, you need to think about selecting a place that is convenient without being cluttered. While the corner of your coffee table or kitchen bench may keep your bills close to hand, they are likely to get in the way and end up being used as coasters or getting lost under magazines, books and other mail. Conversely, if you store your bills away in a locked box in your cupboard you might run the risk of them being out of sight out of mind. You need to create a “financial hub” in your home, which could be a simple crate, folder or box file where everything is filed in an organised fashion. This will help you to see at a glance the date a bill arrived and whether or not it has been paid.
Open Every Bill
If you’re in dire financial straits, the idea of opening your bills might fill you with dread, but if you don’t open them straight away there’s a good chance that they might slip your mind altogether. One of the main steps in bill management is to know which bills have arrived, how much you need to pay and the due date; the only way you’re going to be able to keep on top of this is by opening every bill the minute it hits your door mat.
Make A Weekly Date For Bill Reviews
Everything would be easier to deal with if payments came out on just one day of the month, however we have so many different things to pay for. From TV licences and mobile phone bills to loan repayments and insurance instalments, any given day could see several payments coming out of your account or, on the flip side, none at all. If you’re sitting there thinking “how can I keep on top of my bills when there is no obvious schedule” the way to deal with the problem is to set some time aside once a week for to review your bills.
Check every bill that you have received that week and check for any bills you have received that have a due date that falls within the next 7 days. This gives you the ideal opportunity to get up to speed and to deal with any paperwork or make any phone calls to solve any issues, for example a query about a charge, well before the date that you need to actually pay up.
If you have a regular time and day each week when you sit down and look again at your finances you will find that this review becomes a habit – a habit that could help you to keep on top of your payments in the long-term and stop you falling into the trap of getting behind.
Set A Staple Date For Major Payments
The best way to keep track of bills is to pick a certain date every month to make regular payments to all of your primary suppliers and providers. Your pay day is often a good time to pay all of your main bills as you know you’ll have enough money in your account to cover your outgoings.
If you’re wondering how to avoid getting into debt, one good answer is to set up a direct debit or standing order for the most important payments that go out every month – payments for your rent, your gas and electricity bills, council tax and your water rates. That way, you won’t need to worry about the dates on which you make your payments as your bank will handle them all for you. Then you can be certain that all of your main outgoings are paid on time and in full.
How To Track Online Payments
Today, more of us than ever are paying our bills online instead of sending cheques in the mail. That’s all well and good, however you still need to keep track of the money that you’re paying out and check whether or not it has reached its final destination. As part of your weekly bill review, you should check up on any automated payments that are supposed to leave your bank account and also on any payments that you have made manually online.
Track every payment and note down the confirmation number that you were given so that you have proof of payment in case it is ever needed. You should also check the balance of your bank account regularly to make sure that you have sufficient funds available to cover all of the payments that are due to be taken out in the next few days. This will help you to avoid becoming accidentally overdrawn.
Bill Payment Software
Is bill payment software useful? That very much depends on your own preferences. Some people swear by this technology while others find that they can manage their paperwork manually. Software like Quicken can help you to manage your finances effectively, supporting you with budgeting, planning and bill paying, but those who are not technically minded may find it all a little too complex to be helpful.
Cutting Your Costs
Once you’ve got a handle on all of the amounts that you need to pay out on a monthly basis, you can see at a glance whether it all fits into your budget. The problems arise when your outgoings are more than your incomings. Luckily, there is a way around this. First of all, you need to consider where you can make savings. Are you paying for any services that you don’t use – for example a movie channel that you never watch? Do you have a gym membership you barely use? After you’ve eliminated anything that is surplus to requirements you can then begin to think about how you can reduce the cost of the essentials.
You can use a price comparison service like MyEnergy to look for the right energy package for you at the right price. People who have never taken the time to shop around are often paying out considerably more than they need to, and the Government’s Department of Energy and Climate Change has suggested that 9.5 million households could make a saving of up to £300 if they switched supplier to a more cost effective one. Always check to see if you can cut your energy bills by changing to a cheaper provider as you could easily reduce your outgoings to a more comfortable level by making a few quick and simple changes.
Now you know the best way to keep track of bills you can make sure that you stay on top of your finances and avoid getting into debt.