Tracking Monthly Bill Paying

As your eye catches a glimpse of the electric bill on the kitchen counter, you wonder, "Did I pay that this month, or is that next month's bill?" Quickly you scan the statement, but the dates make it hard to say for sure which period it covers. Pulling out your checkbook, you scan the past several ledger pages to see if you can find a check to the electric company. It's not there, but you're sure you wrote one, now that you think about it. Counting the check numbers, you see that one is missing. That must be it! Now you can go online to the bank and see if that check has cleared yet; perhaps the mystery will finally be solved. If not today, then you'll have to wait for the monthly statement.

Scenarios like these remind us of the importance of organizing monthly income and expenses. While paychecks often remain the same for months if not years, they can fluctuate due to sick days, holidays, and overtime. Monthly budget items like house payment, food, and utilities typically remain stable over a period of time, but what about parties, gifts, and non-essential extras that take a bite out of the budget? Or what if you need to track a bill to see if it has been paid?

These are reasons why you need a dependable monthly paying system. Instead of paying each one randomly when it arrives in the mail, there may be an easier and more time-effective way to manage household expenses:

1. Do your banking. Find out if your bank provides this option free or for a small charge. It may be worth it to be able to look up all the checks that have come back to the bank for processing, especially if you believe you've made a checkbook mistake. Although you may lose the option of receiving canceled checks with your monthly statement, you can get photocopies if the need should arise. The convenience of online banking can put your mind at ease by allowing you to access your account information any time of the day or night, whenever a question comes up.

2. Pay your monthly bills at one time. Even if you get paid weekly or bi-weekly, consider collecting all your household bills in one location, such as a basket or file on your desk, and sitting down to pay them all at the end of the month. Check due-dates to make sure this is feasible for all your accounts, and if not, call to see if you can get the due-date changed so that the bill can be paid at month's end. Benefits include saving time by doing all the bills at once, being able to ensure all the usual expenses have come in and that none are missing, and running a practiced eye over your checking account as you whittle the balance down with each payment to be sure you don't go into negative numbers.

3. Store paid bills in one place. Get an alphabetical accordion file or make a file folder for each routine account, along with one or more for miscellaneous. Keep the bill stub in its alphabetical location, such as "electric bill" under "e" or under the first letter of the actual electric company's name. On the bill stub write the date, the amount paid, and the check number to show the bill has been paid for the month. Pop it into the folder for easy reference if needed.

4. You may want to keep a monthly budget in addition to your checkbook register. The budget outlines what you planned to pay for each expense. Beside that, in a column marked by the month and date, indicate what was actually paid, which will show any discrepancy clearly. Write this by hand on a sheet of paper, perhaps in a notebook, so you have a separate page for each month. Or keep an online monthly budget in a similar format. Either way, at a glance you will get a pretty good idea of how close you're sticking to the budget and whether you are under- or overdrawn for the month.

5. File past receipts in record boxes. Label them with the beginning and ending dates of the receipts that are stored inside. Keep the boxes on shelves in the basement, out of harm's way, such as a flood or pests, and you will be able to easily check old records by knowing where they are at as well as having them clearly marked by month and year. Experts recommend keeping past receipts for up to seven years, while others suggest alternative periods of less or more time.

Good record-keeping is essential for maintaining quality control of your bill-paying activities. Take time to set up a system now so you will have fewer or no problems later.