Financial planning is something we haven’t learned from school. Although a few principles of economics were tacked in high school, no one underwent a full course about how to plan and manage your finances. Money management is a habit we need to acquire, thus would take years of training and experience to master. If you look forward to developing good financial habits, then let’s start with the basic skills of organizing and paying your bills.
Identify and categorize your regular bills
ay for the charges. However, this is not advisable especially if you’re used to borrowing to pay for regular necessities. To avoid doing so, the first thing is to categorize the bills into three: quick loan to pay for the charges. However, this is not advisable especially if you’re used to borrowing to pay for regular necessities. To avoid doing so, the first thing is to categorize the bills into three:
1. Needs – Needs are recurring expenses that you cannot live without. Based on the 50/30/20 rule, your needs should take 50% or half of your net income. Under this category, you can include rent, tax, insurance, medical costs, electricity, cooking gas, transport expense, water, sanitation, online cash loan payment, telephone bill, and internet connection.
2. Wants – Want can be any item not included under the needs and savings category. You can allot 30% of your salary for clothing, dining out, delivery orders, movie, gym membership, Netflix subscriptions, cable streaming, home décor, and even travel.
3. Savings and debt payment – This category calls for the remaining 20% of your budget. This includes your savings fund, emergency fund, retirement fund, and credit card payments for loans and installments.
After identifying and categorizing your bills, you can now plot them on your monthly budget. There are times when the bills payment would require more than 50% of your salary that you end up using your budget for savings and debts payment. If this is the case, then you might want to look for other sources of income to cover the excess. You can also review your budget and see if you can reduce the things which are not necessary like travel, home décor, and other unnecessary payables.
Organize your payment
An organized and systematic habit of paying bills on time doesn’t just cover the availability of funds. Organizing means establishing a routine that can contribute to your peace of mind. Knowing everything is under control and paid on time saves you from worrying and taking unplanned loans or borrowing from loan sharks. This can be possible if you try doing the following:
1. Keep records of your charges and payments – developing the good habit of paying your bills depends on how well do you keep a record of the monthly charges and payments. Have a system of filing the paper bills and storing receipts and other financial records. When you keep a record of everything, it will be easier to retrieve records for comparison and verification of payments.
2. Create a calendar of due dates – Having a calendar will guide you in preparing for money for your due date early on. Mark on your calendar which ones need to be paid on a specific date. Also, mark again once you already made the payment. Make sure you also indicate details of payment like mode of payment used, time, and the date paid.
3. Settle your bills in full each month - Developing a good paying habit is also easier when you pay each biller in full each month. This leaves you with a clean slate of payables for the next billing period. If you leave a balance, you end up paying interest charges and finance fees plus the balance is added to your payable on the following month. If this habit of paying only the minimum persists, your monthly budget will no longer work for the long-term.
4. Choose the best payment method that suits you
The following are ways you can pay your bills on time:
* Auto debit – This is a mode of payment by permitting your biller to take the payments from your nominated bank account.
* Recurring bill-pay – This is a mode of payment that provides permission to your bank to send the payments to the biller regularly. You need to set the exact payment amount and date when payments should be made.
* Online payment – Online payments are done personally by you through e-wallet and online banking apps. This becomes more efficient when you enroll the biller into your account but the exact amount and date of payment are not set or scheduled.
* Payment through partner merchants – Partner merchants like 7-11, Cebuana Lhuillier, Palawan, and other money exchange centers. This mode of payment requires readily available cash. Some borrowers apply for a quick cash loan Philippines a few days before their due date, withdraw the money, and pay their bills in cash through bayad centers and merchants.
Never allow your bills to get on top of you
There are still a lot of ways to help you develop good financial habits. Basic routines coupled with discipline and determination to stay out of debt will ensure better financial health. If you have the chance, pay your bills in advance. Never allow your bills to get on top of you by regularly monitoring the charges and looking for ways to reduce them.