Prevent late and missed payments by setting invoice priority and using multiple bank accounts | 2021
Paying your bills on time is extremely important because penalties can range from minor to very severe. This means that you may be charged a late fee, your service suspended or in worse cases your account could be closed and related products or services removed entirely. Keep money in multiple checking accounts at the same or different banks so you don’t have late or missing bill payments. Group bills in order of importance so that important bills such as mortgages are kept separate from less important expenses such as entertainment. This ensures peace of mind when you are late on payments or run short of cash.
Set bill payment priority
You contribute monthly payments for many of the services and products you need. However, some are more important than others. Give them a higher priority when you set aside money each month. Some examples of critical or high priority bills are rent/mortgage, auto insurance, health insurance, electricity, and internet service. Additionally, you may also want to include funds for home maintenance or repairs. On the other hand, non-critical services are those that you still need but can live without for a month or two or use less money for them. Mark them as low priority bills and assign funds at the end. Some examples of overheads are groceries, clothing, shoes, and leisure and entertainment supplies such as concerts, music, and cable service. Remember to include the online services you use like Netflix or Hulu Plus for your entertainment, Pandora One for music and Amazon Prime to buy and ship your purchases.
Use of multiple checking accounts
After you determine the priority of paying the bill, you can decide to open another checking account at your bank or move to another bank. Set one for critical and the other for low priority. Transfer money to the most important account first. Then you can transfer the remaining funds to the low priority account. Arrange for bill payments from the bank or directly with each service provider.
Record the due date for each bill and check that you have enough funds to cover the most important ones. Check your budget and update it after each bill is paid. If you run out of cash or face a pay cut, you’ll still pay the basic bills first. Thus, you will rest assured knowing that you are managing your basic needs.
Avoiding late or missed bill payments is important in keeping your services connected so you can have peace of mind. Keep multiple checking accounts and assign one to high priority bills and one to low priority bills so you can manage your payments more easily. Transfer your salary to the most important account so that you pay for those services on time even if you experience a pay cut or a shortfall due to unforeseen circumstances. Then you will pay the other bills with the remaining cash amount. These are the people you can live without for a few months or don’t mind trying a downgrade for a while.