Unexpected bills lead to financial stress – which in turn leads to overeating, health problems, divorce, and all kinds of other unfortunate events. That’s not all. Unexpected bills can also lead to a cash advance. While this type of loan can be a good short-term solution, it should never be part of a long-term financial strategy. Instead of relying on loans to pay your bills, we suggest adhering to the following strategies that are sure to help ease at least a little bit of your financial stress.
Late bills shouldn’t be part of your vocabulary. Get rid of the excuses. It’s time to start paying your bills as soon as you receive them. Why? Because late bills come with an added fee. Added fees are the worst kind of fees because if you’d done things right the first time, you wouldn’t have to pay them. Unpaid bills can also negatively impact your credit score, which means you’ll end up paying more interest for any payday loans you may end up applying for. Always, always pay your bills on time.
If you’re prone to misplacing your bills, it might be helpful to get organized. This is simpler than it sounds. Start with the small things. You should check and open your mail every single day (except Sunday, of course). Then, put all your bills in one place (a file folder, a basket, on the refrigerator, etc.). You can also use a calendar to make a bill-paying schedule. Once you make a schedule, stick to it.
Some bills are more serious than others. Like, your mortgage or rent should always be at the top of the list because no one wants to be without a home. After that payment is made, you can prioritize your remaining bills. Here’s the order we’d go with:
You should always consider which bill is due first, as they are all probably not due on the same day. Ideally, you should get to every bill on your list.
Of course, the most important bill is the one with the highest interest rate. If you are carrying a balance on your credit card or have an outstanding cash advance, focus on these bills as much as you can each month. The sooner you pay off a bill with a high-interest rate, the sooner you can avoid that interest altogether. Remember, if you aren’t reducing the amount of principal you owe toward a high-interest loan, the interest will only grow month after month.
If your budget has a little wiggle-room this month, you might consider using some of that extra cash to pre-pay your utilities, pay more on a short term loan, or reduce your credit card balance. That way these bills will already be taken care of next month when it might be harder to pay them off.
Let’s be honest – most of the stuff we buy is a big waste of money. Cable TV is expensive. Consider cutting the cord and getting rid of your cable or satellite TV bill. Restaurants are expensive. Try to eat at home instead of going out. Cell phone bills are always more expensive than you want them to be. Check your phone bill to make sure you aren’t paying for stuff that you don’t actually use, like extra data, caller-ID, and other useless features. You’re not alone. If you need help with any of these strategies, ask a family member, friend, or credit counselor.