The registrar’s email said I would be kicked out of school if I couldn’t pay $3,400 for tuition in 10 days. I re-read the email over and over again hoping the words would change. “How could this happen?” I thought. “Both of my parents are doctors.” I had spent about $6,000 on program costs, flights, shopping, etc. to study abroad the previous summer. Had I planned for the tuition payment, this wouldn’t have happened.
I realized I was financially irresponsible. I didn’t plan how to pay for tuition, rent, food . . . anything. I expected my parents to manage it. They were recently divorced. Within 4 months, my mom had became a single parent financially responsible for 3 kids, buried her father, and took on lawyer’s fees. My tuition fell to the bottom of her long obligations list.
Fast forward 8 years, and I now have a well-funded 401K, an IRA that I started in college, and enough savings for two years of expenses. I am also a blogger at Financially Fab and Smarteys, financial advisor to young professionals, and corporate strategist at a Fortune 500 company. The registrar’s email was my wake up call.
I got a 90-day interest-free loan from the university so I could stay in school. Over the next 8 months, I read 20+ books on personal finance and learned that money was a tool to buy needs and wants. If I handed over my financial life to anyone – my parents, a bank, a credit card company, or anyone else else – then I’d lose control of basic life decisions. I needed to plan how and when to pay bills.
Your turn: Do you need a simple plan to pay monthly bills? Do you want to improve your current process? Check out the steps below! Respond with a comment sharing your financial questions and concerns. I’d love to hear from you.
Simple System for Paying Bills:
1. Reserve an hour of uninterrupted time and gather all your bills into one place.
- Seriously, NO interruptions.
2. Check that you have enough cash to pay bills
- My process:
- I earn two paychecks a month and divide my bills into two groups: beginning of the month and end of the month payments.
- I add up the total cost for beginning of the month bills and make sure it’s less than my beginning of the month paycheck.
- I do the same check for end of the month bills.
- If you get paid more or less frequently, you can divide them into more or less groups.
3. Setup reminders
- Using paper calendars:
- Write the due dates for all your bills for the next 2 months in red.
- Write the date you will send the bill payment in blue.
- Post the calendars somewhere you walk by often (i.e. in kitchen or by computer) or where you sit to pay bills.
- I keep my life simple only having two blue dates. I pay bills twice a month, and leave enough time for mailing and processing between the blue send date and red due date, as that can take 7+ days.
- Online ways to replace old-fashioned paper
- For online calendars, create email reminders for the blue dates. The calendar remembers for you!
- If your online banking website has bill reminders, use that to replace the blue and red dates–as long as you check online banking often or your bank sends reminders.
- Use Mint.com to track bills and receive email or text message reminders.