This step is simplistic, to the point that a lot of people skip it entirely. But, just trust me on this one.
Get out a pen and paper and write down all of the bills that you pay monthly and the amount that you pay.
Analyze these bills. Do you love the service? Can you get a better price?
Write them all down and then take a day or a week to focus on researching each bill, calling around for a better rate, or even a better service for the same rate, and finally analyzing whether or not you even want to keep that service.
Think minimalism – in that if you don’t love it, and it isn’t a required necessity, or you don’t use it – let it go. You can always go out and get more bills if you change your mind.
Set Your Bills to AutoPay.
Take the list of each bill that you pay and set up an auto pay plan for each of those bills.
Contact the company and set up the bill pay through your checking account.
Mark the bill for auto pay on a schedule on paper and set a reminder in your phone.
Create a manila folder for auto pay and put a hard copy of all of the auto pay agreements in there. File this paper in your Financial File Box.
Place a copy of both of these sheets in your Personal Planner.
Return to your budget software.
Fill in auto payments in your budget.
This can be time consuming, so don’t get frustrated or use it as an excuse to procrastinate. Get a weekly planner sheet out and block out times to set up the payments, make a folder, print and assign the agreements, fill out the auto pay schedule, fill in your budget. Break it down or do it all at once. It is up to you, but this is a big step in systematizing your finances so celebrate when you are finished!
Get it done and then do something fun.
Tip: If you use YNAB, putting these amounts into your budget is fairly simple.
Side Note: If you are really, really behind on your bills, or your balance is very low, I don’t recommend auto payments until you get caught up and have enough money in your checking account to handle it smoothly. Don’t use that as a crutch, though! Sit down and figure out how you can get caught up on the bills and get at least a $500 minimum balance in your checking account. One mind game I used when I was starting out was to use $500 as my $0. If I had $540 in my checking account, my paper register read $40. It helped me to stop spending way before I got to the point of emergency. You could also use $1,000 as your Zero if you have more expenses. When you get really advanced, use the buffer – one prior month’s spending or income as your Zero. There are hundreds of mind tricks you can use, and I say use every last one of them that you can think of. Money is a game, so play it by your rules and make it work for you.
ACTIONABLE STEP: Open up your bank statement or login to your checking account. Sit with a pencil and paper and track all of the bills that are paid EVERY MONTH.
Research each bill for a better service at the same or more competitive price!