Thursday, March 19, 2009

Seeing Bills Differently

One of the amusing things that has happened since I've become frugal is how much I actually look forward to getting my bills each month. Lara at No More Spending and I were laughing about it a bit in the comments on the post from Wednesday. Now that I have a budget, I look forward to plugging in the numbers each month and seeing how I am doing.

For example, I love getting utility bills. I'm doing a lot of things to try and cut those - getting my furnace repaired, installing cfls, looking for ways to cut water usage, but the only way I can tell if my tricks are working is by checking the bills. In fact, I get a little anxious if the utilities bills aren't there when I expect them.

But those aren't the only bills, I also look forward to getting my credit card bill and my car statement bill! I am paying those babies off and I love seeing the balances drop. I think, "just a couple more months now and you will be gone!' So it makes me happy to see those bills. I remember times not that long ago when that wasn't always the case. There was a point that I hated going to the mailbox...

Before I was avidly tracking my finances, I would be "surprised" by bills. Sometimes it was the timing, sometimes it was the amount. I've always been better at thinking about my money in terms of a single month, which is sometimes good, but also bad. It meant that quarterly and semi-annual bills (like insurance) always seemed to throw me. I never felt prepared for them and when they hit, I would end up scrambling for the cash. Now I have a little put aside each month in different accounts for those types of bills. I have mini-accounts for the water bill, my insurance, my car registration, the trash bill - basically anything that isn't paid monthly. When a bill hits I have the cash - and it was already accounted for in the budget. (I refuse to pay extra to pay a bill monthly. I would rather pay myself, collect the interest, and then be ready when the bill comes.) I used to hate seeing those bills come in, they felt completely random. Now I am prepared and they don't bother me a bit.

It wasn't just the timing though, I was also surprised by the size of my bills. This would happen often on credit cards. Some people can use credit cards regularly, but I'm not one of them. I have to be very careful about my credit card spending. Since I don't see my balances or can easily access them, I tend to forget about them! I wish I had a dollar for every time I was surprised by the size of my credit card bill, (it would go a long way to helping me finally pay it off.) I've had my credit cards completely paid off twice. Both times that I accumulated debt (ironically during both my wedding and my divorce) the same thing would happen - I would put a couple of small charges on the card and plan on paying it off at the end of the month. Then I'd do that again. And again. Each time forgetting the other purchases, so when the bill came in - it was three times the size I was expecting! So, I would pay off most of it and plan on getting the rest the following month, but that month it would happen again and the balance would grow larger. It got so that I hated seeing those bills in the mail! Now I put everything, except for gasoline, on my debit card. I use a gas card, but I track those purchases closely and expect the bill. Since I have been dedicated to getting the debt paid off, I actually look forward to getting the statements - I want to see how well I am doing.

One of the things I've seen several financial bloggers write about is how getting your finances in order can really be all about finding personal peace. It is so true! I feel so much better now having control than I did when I hid my head in the sand. It isn't bad to open the mailbox. I don't worry as much as I did. It is kind of ironic isn't it? I actually worry less now when I am broke and having to come up with $900 a month than I did when I was flush with cash.

Ain't life funny?

Photo by: rbatina


jc said...

I couldn't agree with you more! I obsessively track my progress with software and look forward to bills coming so I can 'knock them off the list'.

I have found that immediately entering my credit card receipts into my software and putting a fake check into the software program so I know I no longer have the money in my checking account helps me to make sure I can pay it off. When I check my balance the money is gone (I don't bank online so I don't see that I actually have a higher balance).

Congrats on all your progress and successes!

Dawn said...

JC - I can see how that would work. I think I would have to do something similar if I was going to make the credit card thing work for me - work off my budget (where I've tracked my expenses) and not look as often at the actual bank balance. Interesting tip - thanks!

Thanks so much!

Slinky said...

I agree that tracking your budget more than your account balances would probably help. I never worry about what I have in the bank, because I always know there's enough in there (which is also a great feeling!) I just worry about how much I spend eating out and how much of my 'allowance' I've spent.

Also, can you look at your credit card balance online? That might help you keep track of things better too!

Dawn said...

Slinky - I do both. My budget is my main way of tracking, but I also like to see things online. I like seeing that bills clear when they are supposed to, deposits are in the proper accounts and there are no incorrect charges. If I can track my credit card online, I haven't figured it out. It is a rewards card through Bank of America and I hate their website with a passion. But I don't need to track it really since all I am doing is paying it down. If I wanted to use a card again I might do a system like jc, though honestly, I am happy with my cash/debit system for now. The credit card rewards just aren't worth it for me.