in FS, Uncategorized

The Rewards of Routine Maintenance

I had a great weekend. In fact, it was probably one of the best weekends I’ve had in years. I spent all day Saturday and Sunday doing chores. (Well, I watched the World Cup a little, too.) I spent nearly 16 hours doing yardwork, and I loved every minute of it.

This passion for pruning may seem strange to you, but it seems even stranger to me. I generally don’t like yardwork. But here’s the thing: When we bought this house in 2004, I was fairly diligent about performing routine maintenance. I pruned the hedges, mowed the lawn, cleaned the gutters, and did dozens of other little things to make sure the house and yard remained at peak form.

For several years, I stayed on top of things around Rosings Park (which is what we call our two-thirds of an acre). But about two years ago — just as Get Rich Slowly began to take over my life — I let things slide. I stopped pruning the hedges. I left tools outside to rust. I just stopped caring about the routine maintenance that had kept our home looking great.

I’m sure you can guess the results. Over the past two years, the yard has gone feral. The neighbor’s kiwi has mated with our oak. The filberts have developed shaggy manes. Blackberries are sending thorny shoots through every nook and cranny. And the laurels — well, the laurels have been jubilant in their self expression, exploding with twigs and leaves.

Though I’d known it in theory, the past two years have taught me that if you don’t keep up with routine maintenance, your home and yard can get away from you.

Fiscal maintenance
Ah, but this is a personal finance blog, isn’t it? So what’s the connection? Most of you have probably already guessed where I’m going with this. Taking care of your finances is very much like taking care of a yard. A few routine chores performed diligently are enough to help you keep things in line. But the moment you get lazy or distracted, things fall apart.

I’m ashamed to admit that over the past few months, my personal finances have come to resemble my yard. No, I’m not spending more than I earn, and I’m not abusing credit, but I am allowing financial weeds to grow where once I would have pulled them on sight.

Last week, I got a call from a collection agency. It wasn’t a wrong number; they were calling for me. Worse, they were trying to collect on a legitimate debt. They wanted to know why I hadn’t paid the $23.23 I owed the local hospital for services rendered in February. Ouch!

Now, let me be clear: I’m not intentionally evading this bill. In fact, I have enough money in the bank to pay the bill several hundred times over. But somehow over the past few months, this bill — along with about a dozen other pieces of my financial life — got shoved aside and ignored. I thought I had other more important things to worry about, like PR for my book.

Back to basics
One thing I’ve always prided myself on is the fact that I’ve never missed a payment on anything. Even when I had over $35,000 in debt, I always paid my monthly obligations. (Sure, I was making minimum payments, but I was making them!)

When I decided to get out of debt, one of the key habits I developed was tracking every penny I spent. It didn’t matter how small the purchase (or the income) — if I earned it or spent it, I put it in Quicken. But over the past year, I’ve come to believe that I don’t need to track every penny I spend. My habits are great. My income exceeds my expenses by a wide margin. I’m making smart choices, so why should I track my spending?

But there have been unexpected side-effects to giving up my weekly Quicken ritual.

  • I don’t have the data to track long-term trends. (It feels like Kris and I haven’t been going out to eat very much since I started focusing on fitness, but is that really true?)
  • I no longer have a prompt to remind me to transfer money to savings. (I used to use my weekly finance sessions to move money to my savings account or to fund my Roth IRA or 401(k).)
  • And, most of all, I’m not paying my bills.

I know this is stupid stupid stupid, but my former habit of putting everything into Quicken once a week forced me to pay my bills when they were due. Without this trigger, I just forget to pay the hospital bill and rent on my office. The bills sit on my desk, buried under magazines and notes and comic books.

Note: I used to make fun of my cousin, Nick, for this. Nick has tens of thousands of dollars in the bank, yet he’s always getting late fees for things like the electric bill. “What the heck?” I asked him once. “How can this be possible?” He shrugged. “I don’t know,” he said. “I get the bills in the mail, put them on the table, and then I forget about them. They get buried under other mail. It’s only three or four months later that I find them again.” This used to baffle me, but now I understand.

 

There are some simple solutions to this of course. Once great way to handle the problem is to simply pay the bills as they arrive. I’ve advocated this many times in the past, and I still think it’s a smart way to operate. But I have a tough time deciphering what is a hospital bill and what it is an insurance statement. (Seriously: There are times I have no idea.)

Another solution — and the one I plan to adopt — is to simply do what I used to do. I’m going to resume tracking every penny I spend. I’m going to set up the new version of Quicken (Intuit gave me a free copy), and then do what I’ve done for the past six years. Scheduled start date: July 1st. I’m gathering all of the data now.

Final section
Last night, my pal Nickel tweeted the following:

In the middle of a marathon Quicken-updating session. Feels so good whenever I get caught up.

I knew exactly what he meant. Despite my marathon yard-work session over the weekend, I’m not even a quarter of the way done with all of the pruning and trimming that I need to do. But I cannot help but admire the work I have done. Last night, as the light began to fade, I stood for several minutes just looking at the driveway and the garage and the workshop. I felt great. (In fact, I felt so great that I’ll probably spend most of today pruning laurel and filbert instead of writing about money.)

And I’ve made a vow: In the coming years, I will not allow the yard to revert to jungle again. I’ll stay up-to-date on my chores. After all, there’s a sweet sense of satisfaction that comes from performing routine maintenance on anything. It’s nice to know that through constant low-intensity effort you’re able to keep things looking and running smoothly.

For myself, I’m just as excited about resuming my weekly finance sessions as I am about showing the laurels and blackberries who’s boss. (It’s just too bad there’s no equivalent to a hedge-trimmer for personal finance.)

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69 Comments

  1. Last weekend’s yardwork marathon and all the future yardwork you’re going to keep-up with will advance your fitness goals, as well. Two flies with one swat!

  2. I pay my bills as soon as they arrive. It’s much easier that way.

    I don’t know why people procrastinate and pay their bills at the last minute.

    Mike

  3. A suggestion, use a bank that interfaces with Quicken. We track our spending using Quicken but its super easy to get the data b/c I just download it from Wachovia (we use our debit cards for 90% of our spending) then I just have to account for cash spending, if any.

  4. Hey!

    Thank you so much about this post, I WAS considering drop my own penny tracking… 😉

    I used to do the tracking using Microsoft Money, but they stop doing it. So, I evaluated a few other options, my choice was Money Dance (www.moneydance.com), it do the trick and it’s way simpler. I take less time to do the same thing. Since you are starting from scratch and, I suppose, you stoped to avoid the ‘hard’ work, I think you should take a look on it.

    Thanks Again.

  5. “But I have a tough time deciphering what is a hospital bill and what it is an insurance statement. (Seriously: There are times I have no idea.)”

    The insurance statements usually say, in big bold letter, “This is not a bill.” Really.

  6. @Carter (#5)
    True. But the hospital sends lots of statements, even at the start, and these are the ones I find most confusing. When do I stop waiting for insurance to pay and actually send money myself? And remember: The problem is compounded when I’m not paying very close attention, as I describe in this post. Good thing I have my regular bills on autopay, eh?

  7. If I remember rightly, JD has legitimate reasons why he doesn’t like automatic bill pays. However, one of the reasons I do like them is that it reduces massively the number of bills I can forget to pay. When I only have 2 or 3 a month, they are sufficiently unusual that I can just leave them on my keyboard to force me to set up a transfer (usually post-dated to the week before the due date) on my online bank site. If I had to pay everything this way, things would get missed. I know me and my life, and it just would.
    The key to doing things this way, though, is that you do have to be diligent once a month or so when the bank statement comes in (this is why I still get paper statements for everything) to go through every single transaction and match it up with a bill or a receipt. Otherwise, you don’t have any assurance that the correct amount was deducted. I have the rule that I can’t file statements until I’ve “reconciled” them with receipts (at which point I put a tick on the both the statement and the receipt/bill in pen as well). Doing this isn’t as time-critical as paying the bills in the first place, so it works for me, as it’s the time-critical part that always worries me (I’ve never missed paying yet, but it’s a neurosis of mine). Of course, it wouldn’t work if the statements never got reconciled either 😉

    Edit: oh, apparently I’m wrong about the autopay…

  8. “Despite my marathon yard-work session over the weekend, I’m not even a quarter of the way done with all of the pruning and trimming that I need to do. But I cannot help but admire the work I have done. Last night, as the light began to fade, I stood for several minutes just looking at the driveway and the garage and the workshop. I felt great. (In fact, I felt so great that I’ll probably spend most of today pruning laurel and filbert instead of writing about money.)”

    Laughed when I read this because i’m the exact opposite. It seems that no matter how much I get done when I look over what I have completed it always looks like I didn’t do a thing….no matter how many hours were put into the effort.

  9. The hospital in the town I live goes about it better then yours I guess. They wait until all the insurance payments have come in before sending any bill at all to me. They also put in large letters on the bill “Please Pay”. It helps distinguish it from insurance statements and I know when I get something from them that looks like a bill, it is a bill and I need to pay it.

    I track my finances with GNUCash (Like Quicken, but open source and a free download). I hope I never let it lapse, because I love having all that historical data. Right now I have about 6 years worth.

    I also have always paid bills the instant they show up. Most of my regular bills are on autopay, but for the oddball stuff that doesn’t have autopay I try to get a check back in the mail the same day I get the bill.

  10. Ahhh! I did the exact same thing! I was so mortified and upset to get the bill from the collection agency. Mine was for $20. Do you have any idea if this can be tied to your credit rating and what impact it might have?

  11. One way we avoid some of the required fiscal maintenance is that we’ve been putting more expenses on our credit card. I know there’s a sizable contingent out there shuddering at that statement, but it does have some advantages:

    – It reduces then number of bills arriving.
    – Saves on postage.
    – Allows us to see most major expenses in a single bill.
    – Gets us airline miles.
    – And believe it or not, it saves on credit card fees.

    The last point is important to me. Before I started putting electrical, cable, fuel, cell phone and a couple of other routine expenses on the CC, we’d generally charge a couple of hundred dollars a month. My wife is the primary bill-payer and she kind of shrugged off a $2-$8 CC interest fee as she “timed” the payment to our paycheck dates. Now, after the 1st time she saw a $25 fee, she handles that bill within a few days of its arrival. Honestly, it’s probably the best $25 I’ve spent in a long time.

  12. Another idea is to put a basket only for bills somewhere conspicuous, where you’ll see them before they’re due.

    I used to have all of my bills set up to auto pay, but since buying a house, there are frequently stragglers that sneak in (the tree service, wood delivery, plumber, etc.).

    For those, since I usually am in the process of doing something else when they come in (certainly not paying them immediately like I should be!), we put them up on the bulletin board in the kitchen. The fact that I love to cook, and hate to be bothered while I’m cooking, is great motivation to pay them ASAP.

  13. Something this post highlights is that good money management is not intellectually difficult. Nor does it connote moral superiority It is all about habits. Some people get in good habits (for any of a hundred different reasons) and some people get in bad habits (for any of a hundred different reasons). And that determines how things turn out.

    We should be spending more effort figuring out what causes people to get into good habits and forget the rest of it, which is mostly just people talking.

    Rob

  14. Hey, don’t be so hard on yourself, you ARE human after all. Things happen, we screw up, we fix it and life goes on. At least you have a great excuse for your ‘temporary failure’. You are one heck of a busy individual. Just think if you were sitting back thinking about all your bills 24/7 we wouldn’t have all this wonderful content to read.

  15. Do a daily quicken session- I fire up quicken first thing in the morning, do a data exchange and plug in a receipt or two and in less than 5 minutes it’s done. Twice a month (payday) takes a few extra minutes to plug in everything and make transfers and about once a month I spend an extra 10 minutes to reconcile my statement.

    I used to dread the marathon quicken sessions- updating once every couple of months. I’d always have errors and mistakes.

    Doing it daily helps keep everything accurate and easy.

  16. Thank you for the reminder to re-read Being There, a fabulous novel about the relationship between gardening and economic prosperity. Many may remember Peter Sellars’ brilliant performance as Chance the Gardener in the film version.

    And thanks for the reminder to sit down with MS Money tonight!

  17. I’m thinking about trying out quicken but I have a few questions for you.

    Right now I use mint.com (Quicken bought mint.com a while back) which is free. Have you tried mint.com yet and if you have what are the key features in Quicken that you don’t get at mint.com?

  18. What a timely post! I need to get off my duff and get busy on my financial tracking. I did the yardwork this past weekend, and tonight will be dedicated to my often-neglected Google doc for tracking finances.

    Great reminder and a great post, JD! Thanks 🙂

  19. Good for you going back to what works for you.

    Re: bills. What I do is put the bills in a pile (separate from magazines etc.) as they come through during the week and take care of them on Saturday when I get a chance. Unknown medical bills sometimes get pushed off to later in the week because they may end up requiring phone calls during business hours, but they are examined on Saturday.

    Personally I would probably go crazy if I had to track everything. But different things work for different people.

  20. I aim to pay bills every week, and I fail a lot – but all I really have to do is succeed once a month or so to be on top of the bills, so it’s OK.

    Medical bills are the worst, though – our insurance company is always bickering with some provider (recently my partner got two wisdom teeth removed and the insurance company claimed there should only be one tooth removed per visit and fought the dentist over the second “duplicate charge” tooth for six months)

    The only way to stay on top of them is to file them, promptly, and not in my usual “all paper from this company goes in this file” style – I’ve started having a piece of paper with the actual visit details written on it – date, procedures, doctor’s name – and then stapling the bills to it so by month two of the insurance not paying out, when the bills just have an amount and date on them, we know what they are and can call the insurance to lobby them to pay our providers.

    The worst part is, my partner’s employer changes insurers every year, so it’s also messed up on the provider end most years the first few visits. We don’t even go to the doctor that much, and there is always a contested medical bill in my to-do pile.

  21. I have to admit that I always got the feeling you did about your cousin Nick when you talked about NOT tracking everything, so I’m glad to hear you are doing it again.

    It might be that some of us are more inclined to feel the need to track every transaction, but I truly believe that it relieves stress in the long run.

    Also, have you considered trying iBank instead of Quicken?

    I’ve been happily using it for about 3 years now, and I would never go back. Just curious what the personal finance guru would think of my weapon of choice. 🙂

    Later JD,
    Kyle

  22. I don’t understand how organization helps you pay these hospital bills if you can’t always identify them in the first place.

    I have a handful of bills on auto withdraw, long term things with established banks, such as my mortgage, car payments (when I had one). I have even MORE things on auto bill pay such as daycare and the electric bill. I don’t let companies that have no reason to work with me (ISPs being notorious) have access to my account. But I’m not sure why someone wouldn’t trust bill pay enough to put large regular bills on automation. As another poster pointed out, it’s a lot easier to juggle the handful of irregular bills than to write them all by hand on principle.

    I can’t track every penny. I’ve tried and I just don’t get much payoff from the investment. But I totally sympathize with money getting out of hand. When I get sick and don’t cook (or shop well) our food spending goes way out of control and it always takes some time to get a handle on what IS and get back on track.

  23. Hey JD, just an idea…

    maybe you could collect some *methods* people use and write a post about it. So many people starting out stumble around because “do what works for you” doesn’t work when you don’t have the experience to build a system that works for you. It could be a *foundations* type post for new people that find you.

    “Track every penny” or “automate your bills” aren’t systems. They’re tools and ideas. Some people need a few more specifics.

  24. I’m going to sound like an ad, but the way I do this is through Remember the Milk (or whatever todo list you like). I have it on my iPhone so it’s with me at all times. Anytime I think of ANYTHING that needs to get done it goes into the list. If it’s a recurring thing is super easy to set up that up too so I’ll never forget it again.

    Plus the satisfaction of getting to “cross off” (electronically) items each day helps with the motivation to get them done. Driving that to-do list each day from usually 8-15 items is a goal that I like to accomplish.

  25. I’m really surprised that you admitted your error! I think it’s great. So many financial gurus think they have to be perfect and never admit their mistakes. It’s cool that you still admit that you’re human.

  26. It’s possible to “automate” your bill collecting as they come in. For years we have sorted the bills and anything dealing with finance out of the mail each day and put them on the corner of the piano. Every once in a while, I will grab the stack, take it upstairs to my desk, and put it in my bill-paying drawer. When our paychecks come in (we both work at the same place and get paid once a month), I pull everything out, sort it into constant (education loans, mortgage, car), variable (utilities and occasional stuff), credit card, and later piles. Then I just work through the piles. Most of the “later” pile gets shredded, as most of it is credit card offers. This has worked for us for decades. The only problem that I see is that we are going to give the piano to my granddaughter.

  27. your job is to write about making good fincial decisions. I feel that there is a small conflict of interest with you accepting a free copy from intuit. They are hoping that you keep mentioning that you use quicken to do this or that. so Basically you are encourageing all your readers to use Quicken because you recieved quicken for free, and not because it is the best financial decision for your readers. quicken may be the best Program out there but that does not make it the best financial decision out there.
    so please do a idepth study of all the programs out there and please use a generic term so it does not seem like you are endorsing a program just becaus you were given a free copy.

  28. I pay my bills once a month immediately after pay day. Until then they get put in their own special holder.

    This works fine, except for when the bills arrive after bill-day. Or, as in the case of a recent hospital bill, my banks online billpay had an issue creating new payees. Now I keep forgetting to try again, and I fear it won’t get done until next bill-day.

  29. @15 Rosa

    I had a really similar situation with my wisdom teeth in graduate school (6 months of bills and complaints). In the end, credit agency ladies called and I sicc’d them on the insurance company and they worked it out in a few days. I don’t think a credit agency ladies were used to having someone so happy to hear from them. It also didn’t go on my credit report, which was nice.

  30. I completely understand, J.D. I was recently horrified to open a utility bill to realize that I hadn’t paid the previous month’s bill.

    I have ALL of our bills automatically paid and then review the statements online regularly, usually on a weekly basis. However, we have this one obnoxious little bill that can only be paid by check (simply archaic!) and falls “outside” of my normal online financial routine and is at a higher risk of being neglected.

  31. Hospital bills are the worst. Go into the emergency room and three weeks later you get six bills from different departments, half of which are for $0 because they’re already paid by your insurance, one says it’s already late and you were supposed to pay it in person when you were there (which nobody mentioned because you were bleeding at the time), and it’s ambiguous whether your insurance is going to pay the other two, or if you’re supposed to pay them yourself.

    I don’t track my spending, but I can see that issue from both sides of the fence. I remember a few years back, I had gained some weight and was trying to lose it. I spent all summer tracking every calorie I ate or burned through exercise. It helped a lot. I dropped from about 200 to 175. But now, several years later, I’ve made eating healthy and exercising regularly a habit. I no longer feel a need to keep track of everything, because I can maintain my current weight just by eating what looks “about right”. I’m healthier (and lighter) now than I’ve ever been, even at the end of my summer of tracking every calorie.

    Similarly, I don’t track my spending. I’m able to keep on track towards my goals by just doing things that feel reasonable, so that works for me. Some of the things that J.D. finds interesting I don’t care about, like trends in eating out over time. It’s data that I just don’t care to have, so I don’t feel like I’m losing anything by not having it.

    One thing that confused me though, J.D — How is keeping track of every penny you spend going to help if you don’t know how much you’re spending (i.e., whether a bill is in fact something that needs to be paid)? You have to figure out whether you need to write a check before you can enter it in Quicken. Once that’s figured out, you could just as easily send the payment (or not) and *not* enter it in Quicken (which is what I would do).

  32. @Shara (#24) — and everyone else
    I like the idea of collecting financial systems from GRS readers. This sounds like a great Friday “ask the reader” topic. What do you folks want to know about how other people handle their routine finances?

    @Chad (#29)
    I understand your concern over my accepting a copy of Quicken from Intuit. I don’t see it as a conflict of interest. Publishers send me books all the time. Web developers give me previews of their apps. I do my best to not let this stuff influence me. I like what I like, and I say so. I’ve been using Quicken for more than a decade, and while I’m not in love with it, I understand its foibles. I’ve written a lot in the past about other apps, and encourage readers to find one that fits their lifestyle.

  33. I’ve had that problem, too. I have nearly everything automatically paid through a credit card or checking, so the odd bill that comes in for a non-recurring charge (like my car registration, for instance), can get lost in the shuffle. My only solution is to try to pay them immediately.

    My suggestion for the bills you don’t understand is to immediately put them in your to-do pile. You must have an inbox you can add them to. Then choose a time to look into it and write it in your planner/PDA/calendar. That way a reminder will pop up and bug you until it’s done.

  34. I used to save up all my bills in one basket, and then sit down once a month and pay them.

    But it was always an emotionally-agonizing session! Because i) it took all evening and I never seemed to have the stamps or envelopes or check forms I needed, ii) I worried about losing a bill, iii) it seemed like it cost a HUGE amount of money to pay them all at once, and iv) the due dates were sometimes past by the time I got around to paying the bill.

    Now I just pay them electronically through my bank’s bill-pay checking on the same day I get the bill. I’m usually online anyway checking the news and personal email in the evening, so it’s very easy & quick. It’s also easy to see exactly how much $ I have in checking, and if it’s low I can transfer money from savings right then, or just tell the bill-pay system to pay the bill on a later date.

    I also track all my spending in a homemade excel spreadsheet that includes all my finances, that I update it usually every day or two from receipts whenever I pay anything or spend anything (other than $200/month pocket/lunch/coffee money that I take out & carry around with me as cash). This system keeps me very aware of my spending. Like bill-pay, it’s very convenient and quick to just enter one or two receipts in the evening when I’m doing other things on my home computer anyway. I like using my homemade spreadsheet since I tailored it to reflect the spending categories I’m most interested in, such as “books for the kids”, “anything I buy at the grocery store”, or “anything associated with owning my car”. In contrast, standardized breakdowns such as the one automatically provided by my credit card require you to correct the auto categorization of each bill which is typically wrong, you can’t break a charge into 2 different categories, and it’s hard to make categories really reflect your needs.

    And once a month or so I get geeky joy from reviewing the spreadsheet & graphing different stuff, like my spending or investment income, and calculating whether I’ll have enough for my kids’ college in 8 years at my current savings rate, etc.

  35. After missing a credit card bill some 10+ years ago (I’m pretty sure it got lost in the mail), I have set up all recurring payments and/or income as “scheduled transactions.” That way, if I don’t get an e-notice that a bill has been posted (American Express notices to me are “bouncing,” despite the fact that I’ve put all email addresses they listed into my address book), I get a notice from Quicken that it’s time to pay it. This wouldn’t have helped with the hospital bill, but it will help you to remember quarterly, semi-annual, and annual bills.

  36. A combo attack of automatic bill pay, thorough mail screening, and planned annoyance has kept me from ever missing a bill thankfully. All our basic bills are set up on automatic bill pay through our rewards credit card or our bank if they don’t accept credit.

    Any non-recurring bills are received either by email or via regular mail. The emails are marked as unread until the bill is paid (usually within a day or two since I cannot stand unread mail) and the mailed bills get paid within a week since I don’t allow myself to take them out of my purse until they are paid and I can’t stand a cluttered purse.

    Woot for annoying myself into being fiscally responsible, lol. 🙂

  37. @Nicole – that’s great, make them duke it out amongst themselves.

    They do always end up taken care of one way or another, but the heap of unpaid/unpayable/should not be paid bills makes me insane. I usually pay whatever’s come in – we actually pay our credit cards online the day we use them, to eliminate interest charges – and having unpaid bills makes my skin itch.

  38. J.D. I envy you your yard. Good luck getting back in control of it!

    Rob @ #14 – excellent use of the word “connote.”

  39. This sounds like an organization issue, not a tracking issue.

    I try to keep it very simple. Bills go in a bin on the desk. They don’t get lost, or missed. They get paid. Of course most bills are electronic. And are not autopay. They are electronic pay but not auto.

    I also don’t track spending, and I don’t really understand the reasoning. You seem to have a decent hold on your finances.

    Tracking for what. Why? So you know where it went. who cares. It already went. What matters is the money you haven’t spent yet, not the money you have spent…it’s already gone

    If you need something…buy it. The time for “tracking” is at the time you are spending it. iIf you need gas…You get gas. Why spend 30 minutes later on in the month tracking why you bought gas. or food or whatever.

  40. Agree with others, medical bills are the worst and I generally wait 60 days to pay (in order to get the statement from the insurance co. about what we pay, they pay, etc.) but the providers start sending bills before the insurance clears. I’ve been in a situation when I’ve paid a bill, our insurance paid and then I couldn’t get my money back.

  41. Sounds like you mostly just need to clean your desk!

    I have a box that I put bills in when they arrive. Every so often I go through and pay all the bills in the box. If there’s one I don’t want to pay yet, I leave it for next time.

    I also have a very simple checklist of all the major bills for the month (rent, discover, amex, various student loans, internet, electric, gas) and I check off the date that each is paid.

    It’s a lot easier than tracking every penny and with these two simple methods I’ve never missed a payment on anything. I’ve even been the one to call up AT&T or whoever and tell them I didn’t get my bill in the mail becuase I can see on my checklist it’s not paid.

  42. I pay nearly every bill online, and try to pay the moment I open the bill, whether it be delivered by postal mail or email. I like that I can schedule the payment for a week or two down the road, closer to when it’s due, so that my money can sit in the checking account and accrue interest a little bit longer.

  43. Ugh. I really want to track every penny, but I’ve started and stopped about 20 times already. I’ve tried different software, online programs that pull info for you (and always have apparently unfixable glitches that throw off my numbers), paper and pen, but eventually, I drop the tracking.

    We only have two bills that actually come in the mail and require a check, and we’ve never missed paying them, but I’d like to be able to compare spending from month-to-month to know if we’re getting a bit carried away with fancy groceries, etc. It just never lasts long. :/

  44. 99 times out of 100 – I know exactly what bills we should be expecting each month and when they are due. I keep a binder with accounting type forms in there and our budget.

    Long ago when I first got married, I looked at all the bills and how much money we had coming in. I realized that if I paid all the bills at the start of the month (or all at the end) chances were good we would either think we had more money in the bank then we actually did, or worse – would end up with no food or gas money because the bills took up an entire check.

    So I organized the bills by when they were due, called to see if I could get some due dates changed to different times of the month (credit cards and loans are surprisingly flexible), and tried to get the amount owed for ‘bills’ to be about the same per paycheck. I figured out that almost every single bill could be paid online and took out having to wait for something to arrive in the mail.

    Then on payday (which I realize would be hard for the self employed but could still be set up on like the 10th and the 25th) I sat down with my binder and paid the 5 or so bills that were due at that time of the month* and wrote them down. When the next check comes, I flip back to the last checks page, make sure all the checks have cleared, and then start with the bills that are due the second half of the month.

    I hardly ever have any surprises this way or overdrafts. It also lets me catch any mistakes like a service holding a check for way too long or once when my student loan payment was APPLIED TO SOMEONE ELSE’S BILL! I can easily look at any payment, talk to customer service and tell them what day I sent it on and when it cleared.

    Now when regular bills come in the mail, I just toss them in the ‘too be filed’ pile because I know that I have already paid them online or will be within the next paycheck. Heck, most of my bills have been set to ‘paperless billing’ and I don’t even get them in the mail anymore!

    This cleared up a TON of problems with knowing how much pad we have in a month! 🙂 The only time I ever really have to adjust is twice a year for the ‘three paycheck months’. But that’s okay because I am usually dealing with extra cash then! 😉

    *Note: When I say ‘were due at that time of the month’, I mean if I paid bills on the 10th it would cover all dates for the last half of the month such as the 17th, 25th or 30th. Same goes for the second check – even though the check arrives at the end of the month it goes towards paying all the bills that are due the first half of the next month. I can’t even remember the last time I had a late fee.

  45. I really resonate to this, as I’ve been keeping my accounts on Quicken for about ten years. I used to have some bills paid automatically but no more, I still pay everything online every week, but not automatically after experiencing some snafus. Every Friday, I download transactions from my various bank accounts and credit cards, and pay any bills that might have come in during the week. I have all kinds of reminders on Quicken about payments for which I don’t receive a bill, such as tithing, or estimated tax payments. I don’t keep track of every penny, but I have a cash account on Quicken that represents my wallet, and whenever my wallet is emply I refill it and the cash account with an ATM transfer.
    I swear it doesn’t take me more than 15 minutes per week to maintain all my accounts, and I’m so glad to have all this info at my finger tips come tax time. I rent rooms for a living and do a lot of volunteer work, too.

  46. I use a custom piece of software to track my finances. Every Saturday, I go through the receipts in my wallet and any duplicate checks, input them into the software as “scheduled” transactions. I then log onto my bank’s website and fill in the holes and post the transactions in the correct order that the bank did.

    My phone and rent bills are on auto-pay and my salary on direct deposit. When the electric and internet bills come, I go onto my online banking and schedule the payment and also put it into my software. I find that by “paying” the bill right away, then I don’t forget about it, but I don’t think that the companies need my money immediately either.

    I used to track cash, but I’ve found that it’s too difficult to do that when you don’t get receipts everywhere. What I do now is that anything I do get a receipt for is itemized against my last ATM withdrawal and the rest of the withdrawal is “Entertainment”, since my budget for that category is a lump.

  47. I’m actually sympathizing more with the yard work aspect of this post. It’s timely and motivating. I spent much more of my weekend staring at a screen than I would’ve liked, and was just discussing motivation with a friend this morning because I want to get these maintenance tasks done! It is a very nice feeling once it is done, and remembering that is one motivator in getting me to start (and often make much progress) on such tasks.

  48. Plus, what Tara said. I wrote a custom web application back in 2003 and have tracked everything since, not including cash transactions which primarily come out of the bank as ATM withdraws from my Allowance account. Very similar software exists at http://www.clearcheckbook.com although it has a lot more features. I just prefer to use my own server to host my data, and I haven’t had a chance to try out their recurring transactions or see if the forecasting works the way I like.

  49. I just recently did the same thing! Started tracking again starting June 1st. (We had stopped on January 1st).
    Same as you, we were still saving and everything, but I didn’t know where I was standing. And because our income is irregular, it made it all the harder to know how much we had spent on any given thing on any given month…

    When I tracked last year, I would write down every single item from the receipts. Now I don’t. I write down the total and number the receipts. The old way was very practical at times (easy to check what cost what when making a grocery list fro instance, or how often we bought a specific item) but ultimately it was tedious and that played a big part in my stopping it.
    This is a middle ground I’m comfortable with. I’m using a program which makes it easier to follow trends and make averages, too.

    I thought… I really thought we were into the rhythm and didn’t need to track anymore. But I was wrong. It didn’t work out for us. So, back to tracking, and I already feel better about it.

  50. @JD – I used to spend a good 30 min every couple days entering and reconciling Quicken, but we’re out of debt, spend less than we earn, pay bills as they come, and generally very good with our money. I thought I “had” to do this to stay that way.

    Then I decided to spend the $40 to upgrade to the current version of Quicken so I could download transactions and reconcile almost automatically. I no longer enter every detail from a Target or Wal-Mart receipt (that may encompass several spending categories). I look at the big picture – if our credit card bill is more than $1,500 or so I know we spent too much somewhere. The rest of our household bills – mortgage and utilities are paid automatically or electronically and are fairly regular. I’m now spending about 30 min twice a month to update Quicken. The extra time is great.

    Any extra bills we get, like your hospital example, are paid as soon as they come in. If it feels good to track every penny, go ahead, but watch your time and don’t let it take over your life.

  51. An Insurance Statement will say “This is Not Bill”. Love your blog. I pay my bills twice a month right as we get paid so the money gets taken out right away.

  52. We get paid the 1st and the 15th. Within the first couple days of every month, I use the paycheck from the 1st to transfer our “savings” amounts to the various accounts (Savings, Vacation, Car Fund, Gift Fund.) My husband and I each have a certain amount of “fun money” each month that is ours to do whatever. I take that out in cash at the beginning of the month too.

    We use one credit card for the rest of our spending – mainly food & utilities. I get an email notice when the utilities bills come through and I immediately set up a payment to the credit card. (I don’t have these automated because I’ve had problems in the past with getting the companies to stop automated payments. Plus, if I have a problem with a bill, it’s a lot easier to deal with it before they have my money.) Any unusual nonrecurring bills for the month have probably already been paid for at the point of service with the credit card; otherwise, the statement gets put on my laptop and taken care of the next time I sit down with it (ex. car registration.) Our rent is taken out of hubby’s check as an allotment before we even see it because we are military and choose to live in on-base housing. At the end of the month, I pay the credit card bill with the remaining funds from the 1st check and the check from the 15th. I reconcile to zero at the end of every month. If there’s extra, it goes to savings. If I need more for something that month, I pull from savings.

    I keep track of our expenses rounded to the nearest dollar on an monthly Excel spreadsheet divided into basic categories. At the end of the weekend, I’ll collect the receipts stuffed in my purse/ hubby’s wallet from that week and quickly add them to the Excel sheet. If there’s an unusual expense, I make a note as to what was going on (ex. car trip = larger gas expense; larger food bill = bday dinner out.) It’s simple and easy and “works for me.”

    As a child, I can remember my mother collect EOBs from all sorts of medical junk from us kids and setting down at the kitchen table with it all spread out trying to decipher who had been paid what and when and how much she still owed. So confusing and such a pain. I’m grateful that my husband is active duty military and I don’t have to bother with insurance paperwork on a regular basis.

  53. JD – Since you’re starting over, why not give You Need a Budget a try? I ditched Quicken after years of tracking every penny for YNAB and I love it. It fits so much better into a life with a financial plan than Quicken ever did. Rather than just focusing on entering transactions and keeping them in balance YNAB keeps you focused on your budget (and your financial goals). Their new iphone/ipod touch app makes it easy to enter expenses on the go and syncs them with your full version. I’m sure Jesse could hook you up with a free version if that’s all that’s stopping you.

  54. Lady Catherine de Bourgh would probably not consider that a pretty bit of wilderness. Hope the garden (and the finances) feel better after weeding.

  55. Nick can solve his late electric bills problem by just setting up autopay. I have my car insurance and my Internet connection on autopay (another household member handles all the utilities). What I love is that I just forget about them. Nothing to think about. They get paid on time every time.

  56. Hey J.D.! I’m back to liking you now 🙂 IMO, you’ve been sounding a bit “holier than thou” lately. It’s refreshing to read about your real experiences – the good and not so good.

  57. If you’re gonna be late on your bills, make sure the insurance bills are at the top of the heap. Murphy’s law dictates that you’re gonna need your insurance the day it lapses for late payment.

  58. @Bananen – except of course, when you forget to enter the bill into YNAB, then there’s no reminder.

  59. I only have 4 bills at the moment – rent, internet, cell phone, and my credit card. I find online bill paying is easiest because I can pay my bills with my CC and then pay off the CC or I can do a money transfer with my bank account. I take a few mins on payday to pay the bills off and forget about them.

  60. Ramit’s “I will teach you to be rich” automation method has worked wonders for me. I use a slightly different setup than what he outline but I have automatic savings, payments, and earn rewards automatically. I can and do track all of it on line and from my iPhone. I check all the accounts a couple times a week at least.

    Setting up this system finally enabled me to actually snowball my debt and automate my savings. No late fees, no missed payments, no worries.

    I mosly use the bill pay feature from my bank but I do auto withdrawls from my account if it gets me a rate reduction like on my wife’s and my studen loans, mortgage, and insurance.

    @JD … Don’t revert back to wasting time tracking, take the next step and automate. It will save you more money and free up time.

  61. My first job out of school required that I travel a lot, sometimes for weeks at a time; my longest trip was 10 weeks. This was pre-Internet days, and I was single, so I very quickly had to develop a system to reliably pay my bills on-time. Since then my system has matured and I get great data without a lot of time spent. I think all of the components of my system have been addressed in the previous comments, but this summarizes it:

    1) I use MS Money and it downloads all of my spending from my bank (checks and debit card) and credit cards. I don’t bother to break down cash spending, since the vast majority of that (coffee, beer, lunch, lunch beer, etc.) is stuff that I track in one category. So for almost zero effort, virtually all of my spending is in the database and categorized automatically.

    2) I use my bank’s bill pay feature to make paying bills easier. I can pay any bill on the road as well, and if I’m out of town, I can almost always look up the bill online and see when it’s due and how much I owe. I don’t automate any bills except ones I have to, and those only on my credit cards so they can’t take money out of my checking account. This may seem excessively conservative, and it might be, but I have never bounced a check or overdrawn my account since I got out of college.

    3) I open the mail daily, and use the Getting Things Done method to process the mail. Every bill that requires follow-up goes into an inbox. Everything else gets filed or shredded. I read the bills carefully, and if I’m not sure if something needs follow-up I put it in the inbox as well.

    4) Once a week, every Saturday (this works best for me now, it has been twice a month and once a month in the past) I pay all the bills that are due. One advantage of doing it weekly is that it’s not a huge ordeal, and since I’m doing it more often than necessary, I can skip a week without getting into trouble.

    5) I have a list of bills and due dates set up in MS Money, so I know when I don’t get a bill.

    I know everyone has their own system, but this one works for me. Thanks for the gret info J.D. and fellow commenters.

  62. If you’re comfortable with putting most of your recurring payments on a credit card, allowing a *few* legitimate companies to auto withdrawal from your checking account, and using bill payer online through you bank, you should be able to automate your bill paying process. There’s one exception; if I have a medical/dental bill, I do have to do a one-time online bill payment, but it only takes a minute.
    To make this all work, I just need to be sure I have the funds in my checking account.

  63. Billpay is an easy system to describe. I have a paper planner that I use constantly. When I get a new one at the beginning of the (academic) year, I write down ALL my bills for the entire year: rent due on the 1st, gas and electric on the 17th, cable on the 5th, water on every other 15th (I think that’s all of them except for my credit card, which sends me an email reminder 10 days before the payment is due.) I write each one in on every month. It probably takes half an hour.

    I do all the actual payments electronically. When I pay the bill, I erase “rent” from the page. I’ve never forgotten to pay a bill under this system.

  64. I have an expandable folder that has a number for each day of the month. When I get a bill, I write on the calendar when it is due and then put it into the folder. It works really well and doesn’t cost anything except for the initial folder.

  65. WE use a combination of methods, from a basket by the front door for mail (junk goes into the trash without being opened) a written budget where paid bills are noted with an “X” and are highlighted with the date paid, and a Wachovia to Quicken weekly download. However, we are in the odd position of both getting paid on the last weekday of the month. That gives us our entire income for the next month. The weekend before or after payday I print out the new budget, schedule the on-line payments, and write the remaining checks..including our church tithe! EVERYTHING is on a monthly payment. Whatever is left is grocery and fun money (which is on the budget, nevertheless).Works great for us!

  66. I just opened my latest credit statement to find my 1st late fee and interest fee–then checked my email and found this article. I paid the bill using the company’s FREE phone transfer (internet is also free)the day after it was due. I just forgot and haven’t gotten Quicken set up. So, its nice to know even the experts make mistakes and after all, it just money I have in the bank, not debt piling on top of debt.