How to pay bills on time, every time

Paying bills is part of life. But between the number of bills—rent or mortgage payment, car payment, credit cards—and the different ways to pay them, it can be tough to keep track.

However, it’s essential to make timely payments. Paying bills on time can mean avoiding late fees and higher interest rates. Plus, your payment history—or how often you pay your bills on time—contributes the most to your credit score.

First, make a list of your bills for the month. Comb through your credit card and bank statements, and even your credit reports, to find typical payment amounts for your rent, loans and credit cards. And don’t forget to look for other scheduled bills, like car insurance or subscription renewals.

Next, record the bills on a spreadsheet, in a budgeting app or another “method that will keep you organized and help you pay your bills on time,” says Dan Herron, a CFP and certified public accountant. Be sure to include payments that are automatically paid out of your checking account or billed to your credit card. For each bill, write down:

• Name of the company or person you need to pay

• Average amount due (this may change)

• Payment due date

• Payment method (e.g., check, autopay, credit card)

Even if you’re a budgeting expert, there may come a day when you struggle to afford your monthly bills. That’s why you should also organize monthly bills by payment priority.

Using the above list, sort your bills into two groups: higher and lower priority. High-priority bills are for basic needs like shelter, transportation and health insurance, or those that generally must be paid in full. Lower-priority bills are those that are important but offer some flexibility, like minimum payments (like for a credit card) or due date extensions.

Once you have a monthly bills checklist, you can create an organized bill payment schedule and system. Here’s how: 

Many bills are due around the same time. Go through your monthly bills list first and group them by due date.

Some creditors allow you to change your regular bill due date. If you have several bills due at the beginning of the month, consider adjusting your payment dates to create more flexibility in your cash flow. For example, moving a bill due on Oct. 1 to Sept. 25 could help spread out your payments and make your budget easier to manage. Be sure to update your bill payment schedule whenever you make changes.

Once you have your bills organized by due date, add them to a digital calendar and set payment reminders for a week before each bill is due, Herron says.

Staying organized is the best way to pay bills each month. What works best for you might not work for someone else, but there are general guidelines to follow.

Rather than tossing your paper bills aside, keep the unpaid ones in a dedicated file folder or basket. For electronic bills, create a digital folder in your email, on your desktop or in a cloud storage system. Once you’ve paid a bill, move it from the unpaid folder into a paid folder for that month or year, Herron says.

Automating your bills can take the pressure off remembering due dates, but it’s important to make sure you have enough money in your account to cover each payment. Herron recommends using overdraft protection or linking a savings account as a backup to help avoid overdrawing your checking account. Depending on your bank, you may have overdraft protection as a backup source of funds. With Capital One 360 Checking, you don’t have to worry about overdraft fees.

You’ll need to determine how to pay bills that won’t be automatically paid from your checking account. Will you pay them when they come due or on a specific day or two each month? For example, if you have several bills due on the 15th of the month, you might decide to pay all of them the day before.

Good news: You don’t have to rely solely on your memory or your organizational skills to pay your bills on time. You can lean on technology.

First, sign up for reminders from your bank and creditors when your bills are due. You can also receive notices of when payments or checks have cleared and when your checking account balance has gone below a certain amount.

Meanwhile, you might consider using online bill pay through a checking account, which is one of the best ways to pay bills each month. In addition to automatic payments, this service offers features you can’t get from many other payment methods, such as paying multiple bills from one place and scheduling your bills to be paid in advance.

Having savings can help you in an emergency without skipping a bill payment or taking on debt. Many financial experts recommend having enough money stored up to cover three to six months’ worth of expenses in case of a financial emergency.

You can build your savings with deposits now and then, but it’s also a good idea to include saving a regular amount as an “expense” in your budget. And if you have money left after paying your bills, consider setting aside an additional portion in a separate savings account. According to Herron, if the account is a high interest rate savings account, you can earn some interest while you’re at it.

The right savings account will make those contributions go even further by allowing your money to grow over time. With a Capital One 360 Performance Savings account, you can give your emergency fund some serious momentum with a great rate that helps every dollar go further.

If you’re worried you won’t be able to cover all your bills—or you’ve already fallen behind—you have options. While it’s best to contact your creditors before you miss a payment, don’t be afraid to reach out at any point. Many creditors—such as credit card companies, medical providers and banks—have options to help make paying your bills more manageable. For example, they might put you on a payment plan, adjust your payment due dates or waive late fees.

Managing and paying your bills isn’t a one-and-done situation. Be sure to keep your monthly bills list and bill payment schedule updated throughout the year.

Herron recommends reviewing your credit card and checking account statements weekly to “check your spending and see if there are any bills that you don’t recognize or that have gone up in price.” Not only can this help you stay on budget, but it’s also a good opportunity to cancel any subscriptions you no longer want.

If you’re struggling to pay your bills, look for areas where you can reduce expenses or find a better deal. Small changes, like shopping around for cheaper internet service or reviewing subscriptions, can free up money in your budget.

Paying bills may never be your favorite task, but creating a system for how to pay them on time can help you feel more prepared and confident when due dates come around. A few simple habits make it easier to manage your expenses, avoid late fees and stay in control of your finances.

• Keep your bills organized: Track due dates, payment amounts and monthly expenses in one place so you know what’s coming up.

• Set up reminders and automatic payments: Use tools like payment alerts, online bill pay and autopay to stay on schedule.

• Build an emergency fund: Set aside money for unexpected expenses or income changes that could affect your ability to cover bills.

• Review your expenses regularly: Check your bills and subscriptions to find unnecessary costs and keep your budget aligned with your goals.

With the right tools and routines, managing your bills can become a simpler part of your financial routine. The Capital One mobile app gives you convenient ways to manage your account, track spending and stay connected to your finances wherever you are.