A Personal Finance Guide

Is Your Bill Clutter Also “Cluttering” Your Credit?

Sure, maybe you think of bill clutter as an inconvenience and even an eyesore, which it certainly can be. But it could also represent something much more serious: a slowly tanking credit score. And how does that happen? For one thing, when unpaid bills get buried under clutter.

Corralling the Bills

So, let’s talk about those bills. Most of us get them, after all. But some of us try to duck them, whether or not we realize it. Maybe we toss them unopened onto the nearest surface, and then forget or even garbage them by mistake. Or we put them in a spot where everybody piles papers and magazines, jackets and scarves, or even wet swimsuits.

The “burial method” (Plan A) ranks high as a late-fee generator. If the bills are buried deeply enough, you may forget them entirely. That makes creditors testy. And, if they become testy enough, those same creditors report to the bureaus. You don’t need those “dings” in your report; none of us do.

So, why not move to Plan B? When bills arrive, just open those puppies right up. Then, check their amounts and due dates, and stash them somewhere earmarked for bills. That way, nobody gets overlooked or lost, and you get to avoid both fees and dings. Moreover, all those envelopes aren’t creating heaps of bill clutter.

Paying with Auto-Drafts

You might also consider using auto-drafts to pay certain bills. Doing this creates a great upside: invoices get paid on time and with minimal effort on your part. Plus, they don’t sit there looking messy. However, your balance does need to stay high enough to cover your drafts. So if you skate a bit close to the edge occasionally, your auto-drafts might create more problems than they solve. They’re handy if they’re right for you, though.

Creating a Tickler

Here’s something else to try. Before relegating them to their special spot, sort your bills according to when they fall due. Then lay out a tickler that lists due dates and amounts (including auto-drafts) in order, perhaps separated into first and second halves of the month. That way, you know where you are at any given point.

Another benefit (although not clutter related): the list shows you in black and white where your money’s going. You may find that a sobering exercise, and perhaps even a shocking one. (In the signature box, you’ll find a link to a free download of a sample tickler.)

Setting Up a System

Another player here is the resistance some of us feel toward bill paying in general. Maybe because we’re not sure we can cover our bills and also get through the month. Or, perhaps the resistance stems from resentment, rebellion, or shame–or even simple habit.

Whatever the reason, we find ways to put off the task until the absolute last moment. Then–consternation!–one or two payments arrive after their due dates. Those lead both to more fees and to a credit rating that’s steadily losing altitude. Not a pretty picture.

If you have no bill-paying system in place at present, setting one up will cut down on your clutter, help preserve your good credit, and ease your life in general. Such ease, not to mention peace of mind, is one of the goals of clutter busting. Why not get some of that for yourself?

At her site, “Just Do One Thing,” Lynda Edwards explores ways to reach big results with small steps. Drop by to see how such steps might work in your own life. (To find the bill-pay tickler download mentioned earlier, just visit this page: http://www.do-one-thing-now.com/bill-clutter.html).