Stay on Top of Your Monthly Debt with These Tips and Tools

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Want a little extra money in your pocket each month? Make sure that you pay your bills on time. Although federal law now caps credit card late fees at $25 (or $35 if it’s your second late payment within six months), those charges can add up fast if you consistently miss the payment dates. Your utility and phone companies and your landlord or mortgage holder may also tack on some financial penalties if you’re behind even a day with your payments.

Put your cash to better use. Resolve to save yourself some money in 2014 by developing good bill-paying habits. Here’s how to get started. 

Organize your bills.

Many companies now send out their statements by email instead of mailing you a printed copy. That’s fine, as long as you have some kind of system for tracking both those electronic bills and any paper statements that come in.

Don’t let the electronic statements get lost in a long list of emails. Set up a folder in your email account that’s dedicated to bills that need to be reviewed and paid. If you’re still getting bills via snail mail, develop the habit of putting them in a special spot (a basket, a folder, even a certain drawer) as soon as they come in. That way you can be sure that you’re not missing any bills when it’s time to pay them.

Put yourself on a schedule.

Take a look at your bills to see when they fall due each month and develop a bill-paying strategy using that information. It’s usually a good idea to review and pay your bills at least twice a month (the first and the 15th, for example), or even weekly.

Your bill-paying schedule will also depend on how often you receive a paycheck.

(And as long as you’re setting aside time to pay your bills, take a minute to review the current charges on your credit card to make sure that no one has been using it fraudulently. That can save you a lot of time and trouble if identity thieves have stolen your information.)

Set up automatic reminders and/or payments.

It used to be that paying bills meant writing a check. That’s not the case anymore. You can pay most credit card bills by authorizing an automatic monthly draft on your bank account website or by going into your account online and authorizing a payment from your bank account whenever a bill is due. Although the second process does take a little more time, it has the added benefit of making you review your charges to be sure that they are accurate.

Use your credit card to pay bills.

Are you short on cash this month? You might consider paying off utility bills, medical bills and similar debts with low interest credit cards or 0 interest credit cards. Although you’ll ideally pay them off each month, if you do have to stretch your bill payments out you won’t be paying a high rate of interest—and you’ll avoid those costly late fees.

You can also arrange for some recurring bills, such as utilities or cable service, to be automatically charged to your account each month. Review the charges when you receive your credit card bill to ensure that they’re accurate.

Earn rewards

Do you have a rewards card? You can earn extra points by using it to pay off your phone bill, your cable bill and your utility bills. You may even be able to pay your rent—although not your mortgage—with your credit card.

Just remember to pay off the rewards card each month so you don’t end up paying more in interest than you’re earning in points.

Develop a budget so you know what you owe.

It’s easier to make timely payments when you actually have the money to pay off your debts. Analyze a month or two of your bills and make sure you’re setting aside enough from each paycheck to handle them all.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.