7 Reasons You Should Pay Your Bills As Soon As They Arrive

Today’s article assumes that you are not living paycheck to paycheck and have money in the bank to cover your bills as they come in.

If you don’t have some money saved up yet, keep working and remember to apply this when you have some cash in the bank.

So you have money sitting in the bank and you get a bill.

What do you do?

In order to get the most out of your money you should pay the bill on the due date.

This will give you more time to accrue interest on the money in your bank account.

This is how I used to pay my bills when interest rates were three, four or even five percent.

With today’s interest rates at one percent or less, the extra interest I get for waiting a couple weeks to pay my bills just doesn’t justify the risk of making a late payment or forgetting about a bill.

Now I pay my bills when they arrive. Here are a few reasons you should, too.

How Paying Bills On The Due Date Can Backfire

If you wait until the last day to pay your bills, you run many risks that ultimately will cost you more than the pennies of interest you could earn for waiting.

1. The Money Isn’t There To Pay The Bill On The Due Date

Uh oh! Somebody made a mistake! By waiting, you risk not having enough money when it comes time to pay your bills.  This happens more than you’d think, especially if you aren’t using a budget and you aren’t thinking ahead.

You might have misjudged the total amount of all of the bills you have to pay or maybe a surprise bill came up. Regardless of why it happens, if the money isn’t there you can’t pay your bill.

2. You Might Misplace The Bill And Forget To Pay It

Flat surfaces attract paper, junk and other things. If you’re like me, you throw your mail in a pile and don’t look at it again for a few days or, honestly, a few weeks.

When you finally get around to cleaning up your pile of mail and other junk you realize… DARN IT! I forgot to pay that bill.

Another potential hazard is when your spouse, significant other or roommate cleans the house and doesn’t even notice a bill is in the stack of papers and throws it away. If this happens you’re in a whole mess of trouble.

What kind of trouble you ask?

3. You Could Incur Late Fees

Yup, if you pay your bill late chances are you’re going to incur a late fee. Most late fees will eat up multiple years worth of interest on your savings at today’s rates. If that isn’t enough to convince you maybe this next pitfall will.

4. Your Interest Rate Could Go Up

I guarantee if you’re interest rate goes up on a loan or credit card because of a late payment, the extra cost is going to be a heck of a lot more than that one percent or less you are earning yearly for a few days in your savings account.

Multiply this out by the life of the loan and you’re talking some serious cash.

5. Your Service Could Be Cut Off

Forget to pay your cable, internet, cell phone, electricity, gas, water or other service related bill and they can cut your service off.

That would be a nasty surprise when you don’t wake up the next morning because your alarm clock doesn’t go off due to a lack of electricity. I hope you don’t lose your job for being late.

6. The Bill Could Get Sent To Collections

Is this the second notice you have received to pay that bill because you threw the first one away? Do it again and it might go to collections over a measly $10 copay owed to your doctor.

Totally worth a few cents of earned interest. NOT!

7. Your Credit Rating Could Get Dinged

If you’re excessively late and your debt goes to collections your credit score WILL get dinged. This leads to higher interest rates on all subsequent debts to the tune of thousands of dollars over your lifetime.

Well there you have it. Those are the reasons I pay my bills when I get them. In my mind the cons of waiting greatly outweigh the pros in most cases. Especially when your interest rate is a measly one percent or less.

Want to make sure you never pay a bill late again? Check out this awesome post that shares 7 ways to make sure you never pay a late fee again. It even includes a free downloadable spreadsheet!

Do you pay your bills when you get them? If not, are you going to start?

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. As of right now I’m kind of, sort of living paycheck to paycheck. But I have everything budgeted every two weeks and have it worked out so that bills and rent typically get paid a few days ahead of time if not a week or so.

  2. I know we’re different than most simply because of how we budget and how long we’ve been doing this, but we definitely pay bills as soon as they come in. If you looked at my budget the dates associated with each bill having nothing to do with “due dates”…they’re all projected dates of about the time I know the bill will arrive.

  3. Great tips! I had a client who made high six figures who hired me for one reason: she kept forgetting to pay her bills and her credit was horrible. We set up automatic payment systems and she paid all other bills that came in every other week.

    I pay bills NEARLY the day they come in. We have a basket by the door. Bills go there and on Sunday we have a family meeting where we look at them together.

  4. I use online banking. I schedule payment of my bills as soon as I receive the invoice or statement. My only exceptions are bills (medical bills) I pay by credit card. Since I live on less than I earn, there is no problem scheduling bills weeks away.

  5. I pay a couple of bills on the 15th of each month…the rest are automatic. I’ve also got a little chart on my bulletin board that shows the bills I have to pay for each month.

  6. I agree. It’s ALWAYS best to pay your bills right when they arrive… OR… set them all up on auto-pay, like I do. As long as you have the money, and I understand that many people don’t always, it’s best to make absolutely sure that they are all paid early so that there won’t ever be any problems.

  7. I pay my bills automatically with my credit card (always on time, and cash back is a beautiful thing)… unfortunately, I tend to forget the ones I can’t pay with credit, which does back fire some times 🙁

    Luckily those which I can’t pay with credit don’t carry a late payment fee, they just roll over to the next month and throw my cash flow off…

  8. Great post. We have actually set it up where we have the majority of our bills on auto pay or auto debit. This takes away the worry of ever missing a payment or paying them late. It works really well.

  9. Now that I get some bills on email, some are paid automatically and other obligations don’t even bill lme, I’m kind of chaotic around the bill issue. I need a better system to organize. DAre I admit I like the good old days when they all came in the mail and I could touch them and organize 🙂

  10. I sign up for auto pay with many of the companies that I have bills with so that I avoid the late charge thing. I do this because I save my expenses monthly and earn a very little extra income each month. It’s not much, but since companies allow you to earn money off your bills, I take advantage of it.

  11. I try to autmoate my bills as much as possible so that I don’t forget to pay them. In an effort to go green, I went paperless so I get email reminders when my bills are updated, but I never checck my email. Woops!

  12. I always try to pay bills at least 7-10 days before they are due. Since most are paid electronically, that’s more than enough time for everything to clear, and enough cushion that if there is some sort of error along the way, I will have time to react without penalty. Property taxes were due on the 15th, but I made sure to set the transaction for the 5th just to be 100% sure everything worked.

  13. We recently had a change in mailmen and have had quite a bit of difficulty getting our mail. We have missed magazine,, newspaper and bill delivery. I handle my mom’s finances and recently realized that I had never received her insurance premium. Fortunately I realized this in time to call the company and arrange a direct transfer from her account. Needless to say, I have now put that bill on direct pay from her bank account. Otherwise, to answer your question, I pay bills as soon as they come in.

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