Financially Fab Enjoying Life And Working Your Money

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.
• Tips:
  • 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.

• Tips:
  • 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

1. For online calendars, create email reminders for the blue dates.  The calendar remembers for you!
2. 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.
3. Use Mint.com to track bills and receive email or text message reminders.