To give further insight into how I handle my finances, I thought I’d document the lifecycle of a bill at my house. Here are the steps I take with nearly every bill I receive:
The first step in the process is my using a product or service that generates the bill.
I check my mail each day and open all bills. The envelope and other material included with the bill are recycled.
I mark the due date both in my financial tracking software and a physical calendar. The actual bill gets placed in the right side of a folder.
Just before (or on) the due date, I pay the bill electronically. Most of my bills are paid with my credit card, so that I can earn rewards points. My credit card bill is paid in full each month.
I print the receipt of payment, staple it to the bill, and move it from the right to the left hand side of my bill folder. The bill is crossed off of my calendars.
When a newly paid bill enters the left side of the folder, the same bill from the previous month is removed and placed in my filing cabinet. I have separate folders there for each account.
I generally keep three months’ worth of paid bills in my filing cabinet, depending on the account. So when I add a bill to the cabinet, I remove the one from 3 months prior and shred it.
My local recycling now accepts shredded office paper, so my final step is to place my shredded bills in the recycle bin.
In all, each bill spends about 5 months in my house from when it’s delivered by the USPS until the recycling company takes it away. Of that, one month is in the right side of my bill folder, one month is in the left side, and three months are in the filing cabinet. This system is thorough, but it’s easy to follow and has worked very well for me.
How are bills handled in your house?