Flex Your Finances Workout #3: Beat the Bill-Pay Clock

Lamine Zarrad
January 16, 2023
5 mins

Paying bills on time plays a huge role in your overall financial health. Late bills can have a snowball effect on your budget, as fees pile up and you spend more and more of your monthly budget playing “catch-up.”

Here’s the thing: paying bills is a MARATHON, not a sprint. So let’s treat this Flex Your Finances workout like a marathon training session by focusing on endurance and maintaining a sustainable pace.

​🙆 The Pre-Workout Stretch: Prepare your mindset

Ask any marathon runner, and they’ll tell you that their mindset plays a huge role in their ability to finish each race. It’s hard to stay positive mile after mile, especially when you feel like you’ve fallen behind.

The same goes for your financial health. If you’re behind on your bills, odds are it’s pretty stressful to think about your finances. Unfortunately, these problems don’t disappear if you ignore them.

Before we talk about ways to pay your bills on time, we can shift into a positive frame of mind with the following actions:

  1. Write down a positive money mantra that helps you visualize success. It can be something like this: “I am capable of managing my money and thriving financially.”
  1. Repeat your money mantra to yourself regularly. It helps to place your mantra where you’ll see it often, like on your bathroom mirror or in your car.

Feeling calm and confident? You’re ready for your warmup! 

🏃🏾 The Warmup: How do late bills impact you financially?

If paying bills on time was easy, everyone would do it. The fact is, it’s not that simple! 

Let’s warm up our money muscles by learning how people get behind on their bills, and some of the negative consequences that can occur:

What causes late bill payments?

Getting behind on household bills can happen for a variety of reasons:

  • Unexpected expenses
  • Job loss or other emergencies
  • Bill due dates that don’t match with paydays
  • Forgetfulness 
  • Lack of bill management tools

While many of these circumstances cannot be controlled, they can certainly wreak havoc on your finances. 

What are the consequences of late bill payments?

It’s easy to fall behind on bills, but much harder to overcome the negative side effects. If you’ve ever had trouble keeping up on payments, you may have experienced some of these ramifications:

Late payment fees

Late payment fees are common on bills like credit card payments, but they can also be charged by utility companies, phone companies, and more. 

While there are some laws protecting consumers from exorbitant late payment fees, companies still manage to add hefty surcharges to a customer’s bill if they fall behind.

The late payment snowball effect

Not only are late payment fees costly, they can also throw off your budget. Paying late fees from a previous month can eat into the current month’s budget, causing even MORE of your bill payments to be late. 

As more and more bills become delinquent, you’ll also see more and more late fees which exacerbates the problem.

Soon enough, the “late payment snowball” has become too big to manage. At this point, getting your household budget back on track can seem like a hopeless task.

Lower credit score

Late payments can also show up on your credit report.

Most consumers expect late payments on loans and credit cards to be reported to the credit bureaus, but other billers can also take action against your credit score. 

Here are some non-creditor entities that can report delinquencies or collections, which lower your credit score:

  • Utility companies
  • Medical service providers
  • Phone companies
  • Rental companies and landlords

If you find yourself experiencing ANY of the issues above, don’t panic: StellarFi can help. Move on to the next exercise to learn how.

🏋🏼 The Exercise: Find your ideal bill-paying pace

Paying bills should become a steady rhythm in your financial life. Sticking with our marathon training example, you’ll hit your stride easiest when you find the right pace.

That’s what we’ll focus on in our exercise: finding the “rhythm” of your expenses and pacing yourself for long-term success.

Grab a snack and a drink, throw on some energizing music, and let’s get to work!

Step 1: Make a list of all your bills

Using a pen and paper or even your notes app, start listing out all your recurring bills. This list should include things like rent, student loan payments, car payments, utilities, credit card payments, subscription services, gym memberships, and more.

Don’t include variable expenses (like the money you spend on groceries, eating out, or going shopping) in your list.

Step 2: Add your bills to StellarFi

Go through your list bill-by-bill and add each one to your StellarFi account. If you haven’t added a bill yet, here’s the simple way to link your bills:

  • Visit your biller’s website or app
  • Replace your payment information with your StellarFi Virtual Bill Pay Card
  • Your StellarFi dashboard will update to reflect your newly linked bill and will display the due dates of your linked bills

Log in and link more bills

Step 3: Use your StellarFi dashboard to find your “billing rhythm”

Once your dashboard is updated to reflect all your linked bills, you can use your calendar to get a feel for how your bills align with your paydays.

For example, if you are paid on the 1st and 15th of each month, you can assume that any bills that come out in the first half of the month will be paid using the funds from your 1st-of-the-month paycheck. The bills in the second half of the month will be paid using the funds from your 15th-of-the-month paycheck.

Step 4: Try to adjust bill due dates

After all your bills are linked and visible on the same calendar, you may notice some issues. For example, you may have a high percentage of your bills due around the same time of month. Depending on your pay schedule, this can present a problem.

One way to space out your bills is to call your biller and ask them to adjust your payment due date. Not all companies will permit a due date change, but many will! 

You may need to pay a small amount up front, or have a small amount added to your next bill to account for the adjusted billing period. 

StellarFi members will soon have access to features that will make your bill due dates more flexible. Members and subscribers will be the first to know when Flex Pay is available. Subscribe to our newsletter using the link at the bottom of this page.

Step 5: Adjust variable spending around bill due dates

Another option to help find your bill pay rhythm is to adjust your spending on things like groceries, social activities, personal grooming, and more.

For example, if you have a lot of bills due early in the month, plan your grocery shopping, hair appointments, travels, etc. for later in the month. This will help you spread out your expenses, and ensure that adequate funds are available when your bills are due.

Step 6: Grow your savings account

Your savings account acts as a financial buffer. It protects your bill payments from being disrupted by unexpected expenses, like emergency car repairs or medical bills. 

Without your savings as a buffer, unpredictable financial occurrences can lead to a chain reaction of late bills, extra fees, and budget strain.

Step 7: Reduce your bill amounts

You can reduce the amount you pay toward bills each month in two ways. 

First, you can reduce your interest rates. As you pay bills on time using StellarFi, your credit will improve significantly. With better credit, you can seek interest rate reductions on existing loans and lines of credit. With lower interest rates, you typically have lower minimum payments as well which reduces your monthly expenses.

Another way you can reduce your bill amounts is by referring friends and family to use StellarFi. Every time someone uses your personal referral link to sign up for StellarFi, you’ll receive a $5 credit that will count toward the next payment that you have due.

By referring two or three people a month, you can completely offset your smaller bills like Netflix or Spotify. Free streaming services for life? Sounds good to us!

Workout Wrap-up

We hope you leave this workout feeling confident, informed, and ready to Flex Your Finances 💪 The StellarFi crew is here to help you every step of the way.

Log in to StellarFi to pay your bills on time and build more credit.

The StellarFi blog is intended to serve as an informational resource. While StellarFi can help you build your credit, we do not provide financial, legal, or accounting advice. Please consult a trusted advisor for financial, legal, or accounting guidance as needed.

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On-time payment history can have a positive impact on your credit score. Nonpayment may negatively impact your credit score. StellarFinance, Inc. will report your on-time payments to Experian®, Equifax® and TransUnion®. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.