We've never missed a payment on any bill…well, I take that back. There was one time we were late with our rent check, but that was only because our check actually got lost in mail. However, I caught the issue early enough so that we weren't charged anything other than a cancelled check fee by the bank. Other than that, we've never missed a payment (knock on wood) for anything. And while I'm not bragging, there are reasons for our success in this area.
I've been tracking my expenses for nearly two decades now. And over the years, I've begun to break our expense tracking down even further into individual costs such as our home related expenses, utility costs, moving expenses, vacation costs, and similar categories. By building these statistics up over years, we've been able to develop a database of sorts to help us plan and forecast so that we know what costs are coming, when, and in what amounts.
Through a better understanding of our expenses, we're in turn able to convert this knowledge into a working budget. This way we can forecast well into the future, looking at costs for not only the months ahead, but sometimes years ahead.
With our budget, we're able to incorporate not only regular expenses but those costs that come along on a more infrequent basis. The surprise of items like vehicle and home insurance, property taxes, and other high cost or irregularly billed items is taken out of the equation this way and we're able to handle the full brunt of such costs when they arrive.
But even with a budget, we can't plan for every financial eventuality. Sometimes costs outside our ability to control or even our realm of consideration occur, and those costs can range from minor fees to major expenses. And those major expenses, should we not be able to handle them, could result in a bill being set aside temporarily, possibly resulting in a missed payment.
We manage this possibility though by keeping an emergency fund available to help deal with such occurrences. We typically keep this fund at right around $5,000, which covers a variety of possible financial scenarios and allows us to pay most any unexpected bill that might come along.
Write 'em as We get 'em
Another check in our list of checks and balances when it comes to ensuring we pay our bills on time is our "write 'em as we get 'em" mentality. I rarely hang onto a bill for more than a couple days before writing its associated check and getting it ready to be mailed. This helps us avoid setting a bill aside and having it get covered up, mixed in with other paperwork or tossed in the trash. If nothing else, when we have a bill that might not be due for a month or two (like our vehicle and home insurance bills), we have a special place to keep just items so that they won't get lost in the shuffle.
It's no wonder that people miss payments since so many fail to balancing their bank accounts or even check them with regularity these days. With electronic banking and bill pay taking much of the burden of paying our bills off our shoulders, it can also decrease the amount of time we spend dealing with our bank accounts on a regular basis.
This is why I still make sure that we regularly update and balance our checking accounts. Verifying what has and hasn't been paid just twice a month is typically enough to ensure our checks are clearing, that our accounts are balancing, and that we watch for any possible issues along the way. This is how I caught that missing rent check I mentioned earlier, and it's a good way to make sure that what we're paying is being received and cleared in a timely manner and without issue.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
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