How to pay bills on time, every time

Paying bills is one of those forever things in life. But between the sheer number of bills for the month—rent or mortgage payment, car payment, utilities, credit cards—and the different ways to pay them, it can be tough to keep track of it all.

Making timely payments, though, is essential. Paying bills on time can mean avoiding late fees, higher interest rates, and dings to your credit score. In fact, your payment history—or how often you pay your bills on time—makes up the biggest portion of your credit score.

Fortunately, learning how to pay bills on time is often just a matter of getting organized and setting up a bill payment schedule. Try these tips and tricks to make missing bill due dates a thing of the past.

Take stock of all your monthly bills

First things first: You need to make a list of your bills for the month. Comb through your credit card and bank statements, and even your credit reports, to find typical payment amounts for your rent, utilities, loans, and credit cards. And don’t forget to look for more irregularly scheduled bills, like car insurance or subscription renewals.

Next, record the bills on a spreadsheet, in a budgeting app, or using any “method that will keep you organized and help you pay your bills on time,” says Dan Herron, a CFP^® and certified public accountant. Be sure to include payments that are automatically paid out of your checking account or billed to your credit card. For each bill, write down:

• Name of the company or person you need to pay
• Average amount due (this may change)
• Payment due date
• Payment method (e.g., check, auto-pay, credit card)

Prioritize your bills

Even if you’re a budgeting whiz, there may come a day when you can’t afford to pay all of your bills on time. That’s why you should also organize monthly bills by payment priority.

Using the above list, sort your bills into two groups: higher and lower priority. High-priority bills are for basic needs like shelter, transportation to work, and health insurance, or those that generally must be paid in full. Lower-priority bills are those that are important but offer some flexibility—for example, the ability to make a minimum payment (as is the case for a credit card) or to extend your payment due date.

Now you have a categorization system to help you make smart decisions about how to pay bills during times when you’re short on money.

Optimize your payment schedules

Once you have a monthly bills checklist, you can create a bill payment schedule that turns a slew of payment due dates and methods into a more streamlined system for how to pay bills. Here’s how to create one.

Group bills by due date

Many bills are due around the same time. Go through your monthly bills checklist and group them based on due date similarity.

Change your bill due dates

Some creditors allow you to change your regular bill due date. If you have many bills due at the beginning of the month, you may want to move some to the end of the month for better cash flow (for example, instead of paying a bill on Oct. 1, see if you can move it up to Sept. 30.) Update your bill payment schedule if you make any changes.

Add due dates to a calendar

Once you have your bills organized by due date, add them to a digital calendar and set payment reminders for a week before each bill is due, Herron says.

How to organize your bills

Staying organized is the best way to pay bills each month. What works best for you won’t be exactly the same as for someone else, but there are guidelines for how to pay bills most efficiently.

Create a bill ‘drop zone’

Rather than tossing your paper bills onto an already teetering pile of mail, keep unpaid bills in a dedicated file folder or basket. For electronic bills, create a digital folder for unpaid bills in your email, on your desktop, or in a cloud storage system. Once you’ve paid a bill, move it from the unpaid folder into a paid folder for that month or year, Herron says.

Automate as much as possible

The bill pay feature in your Discover^® Cashback Debit account can make paying bills a snap. While automating all your bills comes with the risk of overdrawing your checking account—be sure you have overdraft protection or a connected savings account, Herron says.

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Decide when to pay your bills

Figure out how to pay bills that won’t be automatically paid from your checking account. Will you pay them when they come due or on a specific day or two each month? For example, if you have a bunch of bills due on the 15th of the month, you might decide to pay them all on the 8th of the month.

Take advantage of tech

Good news: You don’t have to rely solely on your memory or your organizational skills to pay your bills on time. Lean on technology for help.

Sign up for reminders from your bank and creditors when your bills are due. You can also receive notices of when payments or checks have cleared and when your checking account balance has dipped below a certain amount.

Also, consider using online bill pay through a checking account, which is one of the best ways to pay bills each month. In addition to automatic payments, this service offers features you can’t get from many other payment methods, such as paying multiple bills from one place and scheduling your bills to be paid in advance.

Have savings ready in case of an emergency

Having savings can help you ride out an emergency—say, a medical issue or a surprise car repair—without skipping a bill payment or taking on debt. Many financial experts recommend having enough money stored up to cover three to six months’ worth of expenses in case of a financial emergency. (Read our guide on adjusting your budget in case of a layoff.)

You can build your savings with sporadic deposits over time, but it’s also a good idea to include saving a regular amount as an “expense” in your budget. And if you have money left over after paying your bills, consider setting aside an additional portion in a separate savings account. “If the account is a high-yield savings account, you can earn some interest while you’re at it,” Herron says.

Ask for help when you need it

If you’re worried you won’t be able to cover all your bills—or you’ve already fallen behind—you have options! While it’s best to contact your creditors before you miss a payment, don’t be afraid to reach out at any point. Many creditors—such as credit card companies, medical providers, and banks—have options to help make paying your bills more manageable. For example, they might put you on a payment plan, adjust your payment due dates, or waive late fees.

Depending on your income level, there are also government programs targeted at helping people pay their utility bills.

Reevaluate and readjust

Managing and paying your bills is not a one-and-done situation. Be sure to keep your monthly bills checklist and bill payment schedule updated throughout the year.

Herron recommends reviewing your credit card and checking account statements weekly to “check your spending and see if there are any bills that you don’t recognize or that have gone up in price.” Not only can this help you stay on budget, but it’s also a good opportunity to cancel any subscriptions you no longer want. If you’re struggling to pay your bills, look for areas where you can reduce your expenses or find a better deal and then take action, like shopping around for cheaper internet service.

You’re in control

Paying bills may never be your favorite thing to do, but creating a system for how to pay bills on time can make you feel much more prepared and secure when the first of the month (or the 15th or the 30th) rolls around.

Automation is one easy step to help ensure your bills get paid on time each month,  and a Discover Cashback Debit account makes bill paying simple and straightforward. Plus, it earns 1% cash back on up to $3,000 in debit card purchases each month.¹ That’s a win-win for anyone looking to stay current on their bills and make a little extra cash while they do it.

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¹ See Deposit Account Agreement for details on transaction eligibility, limitations, and terms.