Why Paying All of Your Bills on The Same Day Could Leave You Broke
Paying all of your household’s bills on the same day every month can help you stay on top of payments. But according to some users on Reddit, paying most (or all) of your bills on payday without some savings in the bank could be a big mistake.
In reality, it doesn’t matter when you pay your bills as long as you pay them before the due date. Some people spread out bill payments over the month to ease the financial burden, while others find it makes more sense to pay off everything for the month at once.
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However, paying all of your bills on payday or on a bi-monthly basis without savings to act as a safety net could leave you with limited funds and flexibility until the next pay cycle. Unexpected expenses or emergencies could also arise, which could leave you even more financially strained.
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Using Your Savings as a Safety Net
If you have the savings, paying everything off on the same day makes budgeting much more straightforward. “The best thing you can do is get a month ahead in your spending,” wrote u/16066888XX98 on a Reddit post about how to handle different bill days with biweekly pay. “So, you’ll spend April’s money in May. This way, you already know how much you will be able to spend waaaay in advance!”
On another Reddit post, u/magintz wrote that they pay down their debts as quickly as they come in. They’re paid every two weeks, but using this method has left them without any extra crash until the next payday.
Some Reddit users recommended using Excel spreadsheets or apps to keep track of income and expenses, as well as dates when each bill must be paid. Another user, u/Top-Personality1216, said they log into their bank account and schedule payments a day or two after receiving the bill. They also typically schedule payments a few days before they’re due and tries to avoid lining them all up.
Scheduling your bill payments ahead of time can also help you avoid missed payments, expensive interest charges and disconnected services.
Some bills, like credit cards and mortgage loans, can also affect your credit score if you make a late payment. Some creditors offer a grace period and give you a couple of days or weeks to pay without a penalty, but being late on others could lead to a late payment fee and lost benefits, such as a promotional interest rate on a credit card, USA Today reported.
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This article originally appeared on GOBankingRates.com: Why Paying All of Your Bills on The Same Day Could Leave You Broke