How to Consolidate Your Bills

Introduction

Consolidating your bills is a great way to make monthly payments more efficient and less of a headache. By reducing the number of bills you pay on a regular basis, whether through debt consolidation, balance transfers, or simply a little reorganization, you'll be more likely to make all your payments by their due dates, saving you time and money.

Step 1: Eliminate Unnecessary Bills
It's possible that your bills can be combined or eliminated altogether.
Pay cash when you can. (Photo by Copernicus Johnson)Credit Cards
It's advised that the average person carry between 2 and 6 credit cards. While some experts recommend carrying multiple cards, you may not need as many as you're currently carrying.
To reduce the number of credit card bills you pay each month, cancel one or two accounts.
Cancel your newest account(s) to maintain the good credit history on your older cards!
Or transfer balances to a low rate card. You'll have only one bill, with less interest.
You can keep other accounts open for future purchases.
Store Charge Accounts
It's advised that individuals carry only one favorite store charge cards, since these cards typically have high interest rates and no rewards program.
Limiting your store charge accounts will reduce the bills you pay each month.
Avoid the temptation to open up new charge accounts, regardless of the incentives they may flash in front of you.
Again, consider transferring existing balances to lower rate credit cards to eliminate excess bills and pay less in interest over time.
Mobile Phone Bills
Consider switching to a family plan so that you only pay one bill each month for everyone's service. You'll eliminate all that extra paper, and probably save money, too.

Pay Cash
Not only will paying cash eliminate the bills that show up a month later, you might even save quite a bit in the process.
Many retailers have to pay a percentage of each sale to credit card companies. Since you paying cash can save them money, ask if they can pass that discount on to you, their loyal customer.
Carrying cash can also limit your spending—you see how much you're spending instead of "just charging it."
Pay in Larger Chunks
For bills like car insurance, you often have the option of paying a larger amount only two or three times a year. Doing so, if you can afford it, can make you eligible for a discount as well.

Step 2: Set Up Auto-Payments Online
Stop writing checks. (Photo by Jeinny Solis S.)Most banks have an online bill pay option, that will automatically deduct regular expenses from your savings or checking account. You can often set up automatic payment for other bills, linking them to a bank account or credit card. Not only is online bill pay faster, but it's also more secure and easier to monitor. Plus you're saving checks and postage!
Check in with your bank about automatic payments.
Also investigate what your options are for other monthly expenses (phone bill, credit card payments, student loans, etc.).
Be sure to keep a careful watch on what's going in and out, both for your financial safety and so you're aware of what you're spending.
If you have attached recurring bills to a credit card, make sure you don't rack up high balances without realizing it.
You're consolidating bills to save time and money, not to pay high interest rates!
If you set up automatic payments for your credit cards, schedule that at least the minimum amount due be deducted each month from your bank account. This way you avoid late payment fees, and the interest rate hikes associated with missed payments.

TIP: Speed up auto bill pay even more by using this easy Firefox method.

Step 3: Consolidate Existing Debt
Eliminating as many debt payments as possible will not only reduce the number of bills you have to pay each month—you'll be on track to pay down debt faster.
(Photo by Steve Woods)See Mahalo's guide to How to Consolidate Debt for information on reducing your debt load.
Be sure to read Bankrate's debt counseling advice before consolidating, particularly if your plan includes taking out a home equity loan.
If you're suffering from too many student loans, visit Mahalo's guide to How to Consolidate Student Loans.
Remember that student loan consolidation rates change every July, so be careful when you consolidate that type of debt.
You can consolidate credit card debt by transferring balances to the card with the lowest rate.
Carefully research any associated fees.
Remember that balance transfers won't solve existing debt, and they can negatively affect your credit score.
You may wish to seek out a professional debt adviser, such as one through the NFCC, the National Foundation for Credit Counseling, or the AICCCA, the Association of Independent Consumer Credit Counseling Agencies.

Additional Tips
Although these tips won't necessarily consolidate your bills, they will consolidate the time you spend paying them!
Try Changing Due Dates
Some creditors allow you to change your bills' due dates, which may make it easier to pay multiple bills at the same time.
Making due dates fall as closely together as possible will reduce the times you must sit at your desk writing checks.
Call creditors like your student loan administrator or your credit card company to see if you can change your due date.
Be sure to consider when you usually receive your paycheck, so you'll have enough in your account to cover all the bills by their deadlines.
Limit New Accounts
Think about the services you require and try to pare down the providers you use. Multiple accounts for movie rentals, department stores, or even newspaper subscriptions probably aren't necessary and eliminating them can make it less likely you'll overspend.
Conclusion
If you're able to consolidate your bills to a manageable degree, you should free up time to concentrate more fully on your budget. You may also find yourself enjoying extra money each month as the result of on-time payments, or other bill pay incentives. More than anything, consolidating bills will help you get a better sense of where all your money goes each month, letting you concentrate on how you might save more in certain areas. Plus you can enjoy the time you would otherwise spend writing checks and mailing bills!
If you think you need more advice on how to reduce your debt load through consolidation, please visit Mahalo's guide to how to consolidate debt. There you will find counsel on the ins and outs of the procedure, from refinancing options to finding a credit counselor.