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Bill paying systems that work

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Ouch. Another failed automatic payment and a $20 dishonour or unarranged overdraft fee down the drain. Kiwis throw away vast amounts of money each year thanks to poor bill paying systems. Come on. Admit it. You’ve paid extra fees for bills that you knew were coming up but failed to pay.

My own bill payment system is failsafe, but only works for people who pay off their entire credit card bill each and every month without fail.

I have put all of my regular bills onto direct debit and automatic payment. That way I get all the early payment discounts and I can ever forget to pay a bill. Where possible the bills are charged to my Visa card, which is paid off in full automatically each month. I just need to check on the 28th of the month that there is enough money in my current account to cover the Visa bill.

One bonus for this system is that every year I build up $100 or more in points that I can spend at the supermarket or petrol station. Or, I can view it as a bonus and spend it on something nice for myself.

Over the years I’ve listened to how people do their bill paying and searched the Internet for ideas. Here are some of the best systems and tips I’ve picked up:

  • Split your pay at the source: Some people have a bills account. When their pay comes in each month a portion of it is hived up to the bills account. The bills are direct debited from that account, which often comes with a discount, or they can be paid using Internet banking.
  • Use an expander wallet or lever arch file: there are plenty of people in this world who work best with a good old fashioned paper system. One way of approaching this is to print out a monthly bill summary such as this Excel spread sheet. File all pending bills in a To Do tray. Make a diary note to pay all bills for the week or month the day after your pay is direct credited to your account. Once you have paid the bill, make a note of it in a Bill Planner summary such as this PDF, and file it.
  • Envelope method: keep a paper system as above, but when you get your pay, withdraw cash and put it into separate envelopes to pay each bill.
  • Tickler file: this system has 43 files, in which bills and other reminders are placed. The first 31 are for the days of the current month, which should be checked and actioned daily. The other 12 folders are for the months of the year. At the beginning of each month the contents of the monthly folder are transferred to the daily folders. This system allows you to set reminders for a year in advance.
  • Calendar: you can use a paper or electronic diary to remind yourself to pay bills. Do make sure you file the bills once paid.
  • Smartphone apps:if you have the short term memory of a goldfish, use your smartphone and pay the moment you remember. Both Android and iPhone provide bill reminder apps that can be downloaded as another line of defence against forgetting to pay.
  • Whatever you do, don’t wait until the very last day to make the payment. People often do this because they’re earning more interest on their bank accounts in the meantime. The trouble with this system is twofold. Firstly you’re not getting prompt payment discounts. Secondly missing one bill once will almost certainly wipe out all the interest you would have made for the year with this system.

    Finally, don’t delay. Do it today. Whichever of these systems you choose, or if you create your own from a combination, it will declutter your life and your mind, which can only be good.


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