Tuesday, November 13, 2012

When and how to pay your bills

If you've been planning your spending, you're already halfway to getting your bills paid on time and in full.  The other half is actually getting the payments out the door.  Fortunately, most companies make this process as easy as possible because they want their money.

You will need:
  1. a bill to be paid
  2. a checkbook or money order OR
  3. an online bill paying system (highly recommended)
The first bill you must pay every month is your rent payment (or, if you've bought a house, your mortgage payment). PAY IT BEFORE YOU PAY ANYTHING ELSE. NO, I AM NOT KIDDING AROUND. THIS IS SERIOUS. AND ALL THIS UPPER CASE TALKING IS GIVING ME A HEADACHE, so I'ma stop, but seriously, pay for your living space first. I know it's tempting to buy Cool Stuff instead, but that new gaming console isn't going to be quite as much fun if you're pushing it around in a shopping cart.

Most of the time you won't get a rent bill; you just have to remember it's due, and send a payment to your landlord, management company or whoever. The simplest way to do this is with an online bill paying system (about which, see more below). I set mine up to print out a rent check drawn on my checking account and send it to my landlord's address every month. Because it's all done automatically, I don't have to remember to pay the rent (though I do have to remember to keep track of it in Quicken), I don't have to buy stamps to send out the check, and I've never had a late payment. And the landlord ♪ LOVES us! ♪

As far as the rest of your bills are concerned, you'll keep on top of them if you pay them as soon as they come in. (Yeah, you could save them all up for payment in one fell swoop, but that never goes well. They tend to wander away from the desktop where they were placed, then pretty soon they're running with the wrong crowd, hanging out with junk mail, setting fire to P.O. boxes... yeah, just... don't.)

First, scan the bill. You're looking for oddities: weird charges you've never seen before, higher costs than you expected (remember, though, that going into fall and winter you'll have higher heating/electricity bills), services you didn't sign up for, or any other suggestions of monkey business. If something doesn't look right, call the company that sent the bill and contest the charge. If you just shrug and pay a bill with oddities, your chances of getting any money back are about the same as a snowball's in Hades, so check first and ask questions.

If everything looks peachy, you can proceed one of three ways. Using the money from your Gotta List (see this post for more info), pay the bill by writing a check, buying a money order, or sending a payment via online bill paying system. We'll cover these one at a time.

Paying by money order

You can buy a money order in a number of different places, including your local post office. In addition to paying for the actual face value of the money order, you'll need to pay a small service fee (somewhere under $2). Some places make you pay in cash; others (including the post office) will let you use a bank card to pay. Make sure the person printing the money order has the right spelling of the person or company to be paid, and the total amount. Double-check the order to make sure it's accurate before you wander off with it.

Tear off the detachable payment stub on the top or bottom of your bill, slip it into the envelope provided (there usually is one), making sure the return address faces out the envelope window if necessary, then slip the money order behind it, stamp, seal and mail. Done.

Writing a check

Most checking accounts come with a small set of checks. After you rip through these, you either have to buy new ones from your bank or order some from a check printing company (do a web search for "check printing company" and you'll find several).

Now's my chance to put in a shameless plug for duplicate checks (aka carbon copy checks). Duplicates make an automatic carbon copy of every check as you write them, so you don't have to track every freaking check number and amount you write -- the copies are already there in your checkbook. Simple, right?

Anyway, writing a check is pretty easy. Using a pen with permanent ink, write the current date on the top, and write out the name of the company on the "Pay to the order of" line. In the small box to the right, write the numerical amount of the bill you want to pay. Under the "Pay to the order of" line is another line where you'll write the same amount, but spelled out in words instead of numbers. (For example, if the amount in the box is $210.96, you'd write it out as "Two hundred ten and 96/100". Only use "and" where the decimal place goes in the number amount.) You do this to make it harder for would-be thieves to alter the amount of your check. Also, after writing out the amount, draw a straight line to the very end where the word "Dollars" is printed, so no one can add anything else on. You can use the memo line at the lower left of the check to write reminders to yourself about what the check was for, or anything else you need to mention on the check: your account number/ID/bra size/whatever. Then sign your name on the lower right line, tear out the check and proceed to pay as for a money order.

Paying by online bill pay system

I love this invention. Seriously, I want to hug it and squeeze it and do stupid interpretive dances about it. It makes my life SO. MUCH. EASIER.

Many banks and credit unions offer an online bill paying system as part of their online banking offerings. Find out if your bank or CU has one, and if so, sign up to use it. If your bank doesn't have one, GET A NEW BANK. Or, you know, get some third-party bill paying system like MyCheckFree. Once you're set up, add a payee. You need the contact information for the company to whom you are paying the bill, and your customer ID number (both of these should be printed on the bill). Enter these, specify how much money you want to send, and the bill payer does the rest.

You can specify what day of the month you want to pay your bill, which account it should pull from and how much it should take out. If you have a regularly recurring bill that's always for the same amount, you can even set up most online bill payers to pay the bill automatically on a particular day. And if for some stupid reason a company doesn't take online payments yet, most bill paying systems will print and mail a paper check to them. IS THIS NOT AWESOME? THIS IS SPARTA!

So that's about it. Pay your bills on time, in full, and in whatever way is most convenient for you, and the rest of that money is YOURS. (But whatever else you do, be sure to put $10 or so aside and go see Wreck-it Ralph. That movie is awesome.)

No comments:

Post a Comment