Updated on 07.30.07

My Weekly Bill-Paying Routine (In The Absence Of Paper Checks)

Trent Hamm

As I’ve briefly mentioned on here before, I’ve almost entirely abandoned paper checks. I keep a checkbook around for the rare situation where one is needed, but I have written exactly seven checks in the last six months and all of those were to local businesses.

Over the last two years, as I’ve gotten more and more used to online bill pay, my bill paying cycle has become largely automated, with only the variable amount bills (mostly utilities and cell phone) actually requiring extra attention.

Once a week, though, I do go through something of a “bill paying” routine. Here’s what I do.

First, on Monday through Saturday, I collect all bills and statements on a pile on my desk. I check the mail, look at anything particularly interesting, and flip the rest onto a stack on my desk. I do the same thing with receipts from purchases that could possibly be tax-deductible. The rest of the routine takes place on Sunday afternoon and eats a half an hour or so.

I check the account balances of all of my accounts. This is just to make sure that there are no surprise charges or anything like that. I usually record the balance of all of these accounts in Excel because I keep pretty tight tabs on my net worth (yes, I update it all weekly and have an awesome little graph of the last year or so, moving steadily upwards with bumps and valleys here and there).

I sort what I have Basically, I pop open all the envelopes and put them into four piles: I need to deal with this (unpaid bills, stuff to look at more carefully, etc.), I need to file this (statements), I need to shred this (less important stuff that may have personal info, like checks from my credit card company), and the trash can (envelopes and inserts).

I deal with the “need to deal” pile Most of this is usually handled with online bill pay. Usually, an item or two requires a bit of research. As I deal with these items, I note on them in pen how I handled it and move it to the “I need to file this” pile.

I file away all printed statements and receipts that could possibly have future use Everything in the “I need to file this” pile gets filed away.

I shred All the stuff in the shredder pile gets shredded up. I actually save the shreddings for kindling for camp fires.

I do any leftover financial review I deem necessary This would include stuff like reading a mutual fund prospectus, doing some research, checking my budget if I’m worried about it at all, and so forth. I don’t like to carry around a big “I ought to do this” list for my financial stuff, so I try to take care of it at week’s end each week.

And then I’m done! It takes between a half an hour and an hour and leaves me with a strong sense of accomplishment.

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  1. Sean says:

    I used to make piles but I was so bad at actually dealing with them after-the-fact that I’ve implemented a new system for myself: immediate payment.

    Since I use online banking pretty much exclusively, spend according to a strict budget, and have online bill-pay from my credit union, I pay bills moments after retrieving them from my mailbox. It generally takes under a minute to log in and hit submit on a payment now that I have everything added to my online banking system.

    It’s easy, quick, avoids piles, avoids things getting lost, eliminates potential for late fees, and it makes me feel good in little bursts throughout the month. In fact I almost look forward to getting bills in the mail because I get to check another item off of my budget each time. :-)

    I love always being current. Life was a lot more stressful when I flew by the seat of my pants and had to manually write out and mail checks.

  2. MoneyNing says:

    Wow you are pretty organized :) You must not miss a deadline too often!!

  3. DG says:

    How do you manage the numbers in excel? I’ve started to track my worth in there, but I’m realizing that pretty soon I’ll have more data than I know what to do with. I’d like it to be nice and clean looking, but I’m thinking that probably won’t be possible. Any thoughts?

  4. Tom M says:

    I’m sure you meant to say that you recycle the envelopes and inserts…:)

  5. Jared says:

    I pay most of our bills online as well, and I write 3 paper checks a month – 1 for the mortgage, 1 for our medical center, and 1 for my grandparents (we got a 0% car loan from them).

    I, however, moved all of my bills so that I pay them within the first week of the month – of course, it’s always depressing to see 80% of our money disappear in the first week…

  6. MikeVx says:

    I have my bills organized in an OpenOffice spreadsheet. One set tied to the first check of the month, the other set tied to the second. If a bill gets lost in the mail, I have the spreadsheet as a tickler. I get paid on a two-week cycle. When I get a 3 check month, I put the third check into my ING Orange savings. I use another OpenOffice spreadsheet to divide my ING account into sub-accounts (saves on the problems of lots of little real accounts) and the 3rd check goes into the car payment buffer to make the payments for the next 6 months.

    I use on-line payment, but I have a legacy account with CheckFree rather than using my CU bill pay, largely because that sort of thing did not exist at the time. You can’t get that type of account any more. CheckFree bought Transpoint, which was my original on-line service. Yes, I have been doing this for a long time. I have yet to run out of old checks that have the 19 embedded in the date field. My CU has changed names since then. (Suddenly, I feel old.)

    I am taking advantage of electronic payment to beat down a credit card by making two payments a month, which would be harder by shuffling paper. I know there are some who say I should use a different pattern, but this works for me. If nothing else expensive happens, the credit card hits zero in October.

    I scan my bills into the computer and shred the originals. I periodically encrypt my scans and upload them to an on-line disk space service as backup. Paranoia can be a good thing sometimes.

    I have to pay for parking near work with a check, otherwise I have no regular checks that I write each month. The rest is odds and ends.

  7. Samir says:

    I also collect bills from Monday to Saturday and then pay them online every sunday afternoon routine. When the bills arrives i will mark the due date on top of the envelope and place them on the “Feed Me Online” pile, this has helped me organize my spending and enabled me to move the credit card due dates to avoid clashes with utility bills. Plus the window envelope are great to store credit card receipts based on category of expense.

  8. limeade says:

    I don’t really have a schedule for paying bills. I typically pay them whenever they first arrive in the mail. I also have a list of everything in Excel so I’m sure not to miss anything.

    I have to write a few actual checks still, but nothing that’s too overwhelming.

  9. Chris says:

    I do the immediate payment method as well. As soon as I get a bill, I pop onto my bill pay account, type in the amount, schedule it, and I’m done. I used to realize the night before a bill was due that I needed to pay it still, and end up making a special trip down to a utility payment drop box, or using a pay-by-phone method just not to be late. Now, I don’t worry about bills one bit, and it takes nearly zero of my time.

  10. Esteban says:

    I like the Simple Dollar. I probably check it out at least 5 times a week, but I got to say that this post was so “simple” that I decided to submit a comment. Sometimes, it might be better to not post at all. No worries though, most blogs on the Internet suck and competing in the personal finance blogsphere is probably not easy. I’ll have to take on the challenge myself some day.

  11. Cheryl says:

    I have pretty much the same routine, the only check I write is to the homeowners ass’n for my quarterly maintenance fee….HOWEVER, I put envelopes and inserts into the RECYCLING BIN..which is conveniently located right next to the wastebasket by my desk! And, yes, you have to remove the little plastic windows from envelopes…takes about 10 seconds…a small effort to support my green commitment!

  12. yvie says:

    I pay virtually no bills myself as all of my bills are automatically deducted from the various companies. Of course I get a statement so I know how much is deducted and why.

  13. Scarfish says:

    I’m with DG–I’d like to read more about your net worth tracking in Excel. I’m great at following instructions for setting up such a chart, or using a templated one, but not so good at figuring out how to do it myself…yet I know it’s something I need to do.

    I have things fairly automated. My cell phone bill is automatically charged to my credit card, but I check the statement as soon as they email it to me (before they charge the card) in case there are any problems. I pay my credit card bill online as soon as I receive the (emailed) statement. Internet/cable and electricity bills I pay as soon as they show up as well (both online). The only checks I write each month are for rent and cash (I use Dave Ramsey’s envelope system, so need odd/larger amounts than I can get out of ATMs). Since most of my bills/financial paperwork (including all info on my 401k and IRA, all bank statements, all credit card statements, and all payroll information) is online, I have very little filing to do. 90% of the financial paperwork I get in the mail is privacy policies or shreddable junk.

  14. David says:

    Paperless is the way to go, it is also healthy for the environment. But beware of becoming lazy and not checking your accounts if money is deducted automatically, because you may be paying for certain things you shouldnt be billed for. Not you though simple dollar, you seem to have everyhintg underwraps. :-) Good process.

  15. Mukesh says:

    I also use a very similar process. The only additional step that I do is after I address the “need to deal” pile I scan the bills, invoices, letters, privacy policy updates, account policy updates etc etc, anything from my financial institutes and electronically categorize and file them in PDF format. I have a automatic sheet fed scanner that scans documents (both sides) at once so it is pretty easy. I also file the actual paper as well.

    Also wanted to comment on the online bill pay part you mention where you have to manually attend to the bills that are variable. I bank with Bank of America and they automatically pay the Total Amount Due on the bill so even if it is not constant they pay the right amount on the due date.


  16. Debbie says:

    Do you recommend paying on the due date? I am paranoid and like to set it up for three days in advance. Then if there is some kind of computer problem, my bill is already paid. Unless the computer problem lasts for three days.

  17. Amber Yount says:

    I want to get rid of our checks, but we need them for paying my husband’s child support, rent, and a personal loan from a “friend” and I’m too cheap to buy a money order, when I get free lifetime checks from usaa :)

  18. Mukesh says:

    Debbie, for e-bills and bills that can be processed on same day or 1-day I usually pay on the due date because I know that the Bank has a link or system integration with the biller and so I’m comfortable with that. I’ve used online bill pay for 9 years now and I can’t recall even once that it missed the payment (unless it was my miscalculation).
    For bills that require more the 1-day processing I pay it one day before or if the due date is on a weekend I pay it on Friday.

  19. peter says:

    I get all my bills through epost.ca. Bell, Rogers, TD, Canadian Tire Mastercard, and tons more are available.

    You get a reminder email when the bill comes in. It archives your bills so you don’t have to worry about historical records. Best of all it’s free!

  20. Lauren says:

    We do the actual bill pay part very similarly to how you do it. It’s just minus your pile system. Usually there are several little piles around the house that we have to go hunt for. But we have a little check list (to make sure all bills get paid) and only a very few number of places that mail gets dumped. I like your pile system much better :)

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