Sounds simple: pay bills on time. In reality, bills come with their own complications and can cause stress and anxiety for people. Researchers say this financial stress lowers our psychological well-being.1 If you’ve ever missed a bill payment—around 46% of us have2 you know the feeling.
Take back peace of mind by rethinking your bill-paying routine. Streamline payments, evaluate spending, and feel happier hitting “Pay.” Here’s how:
1. Create a budget
Planning = peace. Take one hour this weekend and create a steel-trap budget for next month.You can even factor in a lump “surprise cost” that can help cover an unexpected fee.
Download Super budget worksheet (XLSX)
Do this once a month in preparation for the next. Consider if you have a getaway on the calendar, an upcoming car insurance payment, or want to put money away. Every month will look different, but a spending road map helps you track and simplify monthly bills and anticipate the exact amount to set aside for upcoming expenses.
After doing this, “there are no surprises,” says James Daniel, a certified financial planner and president of the Financial Planning Association of Georgia. “And you know what you are committed to.”
2. Evaluate expense versus experience
Know what feels better than paying bills on time? Cutting one from next month’s expenses. Go through your expenses one by one, and assess your bills for two things: amount spent and resulting experience. Does your bill reflect a positive investment, experience, or purchase? If not, consider letting it go.
The American Institute of CPAs found that while bills are a common cause of debt, certain kinds can be a smart investment and improve your long-term financial situation.3
If what you buy brings you happiness, advancement, or positive experiences, you can look at those bills as positive investments.
3. Get alerts and apps
We forget about bills—it’s human. Especially when multiple bills are due at different times. Eliminate the stress of a missed deadline by setting up online bill-pay reminders.
4. Align due dates with payday
Most billing plans for credit cards and loans allow you to decide when the money comes out of your account. Go in and change the due dates to coincide with paycheck weeks. This strategy is particularly helpful if you’re concerned about having enough funds in your checking account to cover bills.
It’s unlikely you can change dates for expenses like rent or utilities, but those due dates are fairly anticipatory, and you can rely on that trusty app for a reminder!
5. Spread out large expenses
For your largest expenses like rent or car payments, spread the cost across more than one paycheck to soften the hit to your balance.
Paid biweekly? Set automatic transfers from your checking to your savings account on the two days when you’re paid that month. From there it’s easier (mentally and financially) to transfer the money back over to checking when the bill is due. Or, if you want fewer steps to keep track of, consider having an account specifically for bills—no back-and-forth transfers necessary.
Daniel says this approach helps you pay bills on time while allowing for leeway on day-to-day expenses like groceries.
More than 60% of people make one-time bill payments2 instead of leveraging automatic or recurring payments. This can result in late payment charges and added stress.
Quickly automate payments directly from your checking account, especially for recurring bills that charge the same amount each month—think phone bills, streaming services, or student loans.
What about expenses that fluctuate? Daniel says automating bills like your credit card could throw off your budget if the statement is higher than you planned. This affects your checking account and could throw off plans for paying other bills. If you want to automate everything, avoid this pitfall by opting for email reminders that show exactly how much will be charged and when.
Automation can be a helpful tool to simplify monthly bills and reduce stress. (For more on automating your finances, check out these 5 good financial habits you can make automatic)
7. Choose the right account. And bank.
If you’re being hit with late fees and unsatisfied with your bank’s automation or website, go shopping for a new account that does more for you. Don’t settle for hidden fees, etc. Yes, you should love your bank!
Ask about overdraft fees, late-bill charges, and forgiveness plans.
The same applies to credit cards. Choose one that’s right for you and your spending habits.
8. Get to the root of stress
Are you planning for a family? Looking to buy a home? Receiving a bill can trigger stress responses that actually relate to another factor of your finances. If you’re finding each bill significantly impacts your well-being and mood, consider enlisting a session with a financial therapist.
Financial therapists provide holistic care that addresses finances, mental health, and relational health. Stress and finances are intertwined, but there are tools to address both simultaneously. You can find a financial therapist in your area by searching the verified Financial Therapy Association Network.
By making a few small modifications to your routine, you can simplify monthly bills, save money, cut stress, and build financial (and mental) resilience. A consistent practice of paying bills on time also strengthens your credit score, which can earn you better interest rates on bigger expenses down the road.