|Terry Rigg is the editor of the Budget Stretcher Newsletter. The
Budget Stretcher Newsletter is published monthly and is loaded with
information that will save you time and money everyday. Go to
http://www.homemoneyhelp.com for more information.
heard it before. "You always have to pay your bills on time or
it will hurt your credit rating." The fact is that not paying
your bills on time can also cost you a bunch of money.
The last time I checked, being late on
a credit card payment can cost you as much as $29 each time. In some
cases this is more than the payment.
Most banks and loan companies also
charge some sort of late fee. Even my electric company tacks on 10%
if you don't pay on time.
The bad part of this is that most of
the time making, late payments can be avoided. That's because they
are simply a result of a lack of organization. If your bills and
receipts aren't kept organized, there is a good chance you will
eventually be late on a payment.
There is nothing more frustrating
than receiving a bill for something you know you've already paid and
not being able to find the receipt or cancelled check. In this case,
if you can't prove you already paid it, then you still owe it.
You have to have an organized filing
system that you keep up with faithfully. At Budget Stretcher, I have
a system so that you can have your budget, bill paying and filing
system all in one convenient three-ring binder.
To use this system, you will need to
setup a budget using The Complete Budget and Bill Organizer. This
organizer is available free at
I would suggest visiting this page to setup your budget before you
try to set up your organizer.
Whether you decide to use my Bill
Organizer system or another system, you need to have one. I am going
to go through my system step by step.
Keeping track of your bills each
month can be a headache. How to organize your bill paying and keep
track of those receipts, canceled checks, loan papers and other
important paperwork can be made easy.
Below is a list of supplies you will
need. These are available at all department and office supply
Ring Binder 1 ½"
Protectors(Designed to insert in 3 ring binder)
on Tab Divider
Step One: Open your three-ring
binder. Insert your pocket tab dividers. In front of the pocket
dividers, place the Write on Tab Divider. The Write on Tab Divider is
designed to provide support while you are writing on the Monthly
Step Two: After you complete
your Budget as outlined in the The Complete Budget and Bill
label the dividers. Start by labeling the first divider, Bills to be
Paid. Then label the rest of the dividers with the names of your
bills. See the below sample:
Divider Tab's Labels: Bills To Be Paid,
House Payment, Car Payments, Utilities, Telephone, etc.
Continue this until you have a
divider for each bill. If you don't have enough dividers, I suggest
that you combine similar bills. This could be all car payments,
utilities or credit cards.
Step Three: Place your Budget
Form, Monthly Bill Summary, and Page 2 of the Monthly Bill Summary
in the document protectors. Then place them in the three-ring binder
in this order: Monthly Bill
Summary (this will be the first form you see when you open your
binder), Budget Form, Monthly Bill Summary Page 2
USING YOUR BILL ORGANIZER
Step One: Gather all of your
bill statements and payment books and place them in the pocket
divider labeled Bills to be Paid. This is where all the bills are to
be placed when you receive them.
Step Two: On payday, look at
section 2 of the Monthly Bill Summary to determine which bills need
to be paid that payday. Write out your checks for these bills and
get them ready to mail. On the statement for each bill or in your
payment book, write the check number and date paid.
Step Three: File all
statements in the pocket divider corresponding to that bill. When
you receive your bank statement and after you reconcile it, also put
the canceled checks in the pocket divider corresponding to that
bill. File any correspondence in these pocket dividers.
One of the biggest problems people
have with organizing their bills and receipts is not knowing what to
keep and what to throw away.
First, there are really four types of
files. Personal (bill receipts, etc), tax files (any paperwork that
is required for taxes), long term files (mortgages, car contracts,
or any other contract) and important papers (will, birth
Personal files are the files
mentioned in the Bill Organizer. At the end of the year, if the
files aren't too thick, you can consolidate them into one folder
labeled with the year. Examples of things in this category are:
monthly insurance statements, credit card statements, mortgage
receipts, and any other monthly statement. KEEP THESE RECORDS FOR
Tax files can be filed in a folder or
accordion folder. These items include: W2 forms, 1099 forms, all tax
forms with attachments and any other form that you receive that must
be reported on your taxes. KEEP THESE RECORDS FOR THREE YEARS. It is
best to keep your previous years tax forms plus the three years
before that. The IRS only audits back three years. You can destroy
Long Term files include your mortgage
or lease agreements, notes on car purchases or any contract that is
still in effect. Keep these files in a safe place. KEEP THESE FILES
AT LEAST UNTIL THE AGREEMENT HAS ENDED. MY SUGGESTION IS TO KEEP
THEM FOR FIVE YEARS AFTER THE AGREEMENT HAS ENDED.
Important papers should be kept
together where you can lay your hands on them quickly. You might
want to use a safety deposit box or at least a locked drawer. These
items include: wills, deeds, trusts, stock certificates, birth and
death certificates and any other extremely important documents. KEEP
THESE FILES INDEFINITELY.
As you can see, this organizer will
help you keep everything in order. However, no organizer will be any
good if you don't keep up with it.
One tip that will help you keep this
organizer neat is to eliminate any paper that doesn't need to be
there. Many people keep the envelope that the bill is received in.
You will find that this will clutter your organizer faster than
It is also not a good idea to fold
your receipts or copies of your statements unless you absolutely
must to make them fit.
Having a system to file your bills
and receipts will make it much easier to know what bills are due and
when they are due. Once you know this, paying your bills on time is