Good habits will keep your finances in order

We all have our bad habits. But a habit that is convenient for you in the short term can prove disastrous in the long term, especially when it comes to your money.

When you interact with the financial world, the smartest strategy to take is to try to build trust with your lenders and financial institutions. When you can show through your behavior that you are responsible, you’ll have an easier time with large financial transactions in the future.

Here’s a bad habit that runs counter to that aim: paying your bills late.

The cost to you

If you pay a bill late once or twice, within 30 days of its due date, it won’t hurt you too badly — especially if you have a long established pattern of paying bills on time.

But if you make a habit of paying your bills late, the pattern will not look good to your current and future creditors. The costs are high: you’ll be charged late fees, late credit card payments can trigger penalty APRs, your credit score will sink and your future APRs could rise. If your credit score stays low, you could have a much more difficult time obtaining new credit. Those late payments recorded on your credit report don’t go away quickly: negative information can stick around for as long as seven years.

The remedy

First, get organized. Designate a specific place in your house for unopened mail, and a separate place for your opened bills. If you receive your bill notices electronically, create a separate folder in your email account. Funnel your bills to these areas as soon as you receive them. When you’re ready to pay bills, you won’t need to hunt for them, or forget to pay a bill because you left it buried in a stack in your living room.

Next, draft a bill schedule. It helps to have a checklist of your monthly bills handy, so you know you’ve covered all your bases.

List your bills in chronological order, and you can easily split your bills between your pay periods.

Finally, pay your bills as soon as you receive each paycheck. With this approach, you don’t need to remember a bunch of different due dates — your paycheck itself serves as a reminder.

More you can do

For more peace of mind, try to get a month ahead on your bill payments. The further ahead you are, the more leeway you have in case an emergency comes up. Focus on one account at a time, and either pay ahead or keep that amount in a separate, reserve account. It can take some penny – pinching for a month or two, but it will help you be prepared for any upheavals that come.

You also can try listing your late fees. If you chronically pay late on one or two of your accounts, it may help to post your late fees in a place where you’re sure to see them. Try keeping your list with your calendar for the month: think of it as saving that amount of money, by paying on time before the due date rolls around.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 19 years experience in retail banking and with financial institutions in Guam and Hawaii. You can email him 


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