Getting ahead of your bills

Every month that never ending stream of "You owe Me" comes running through your mail box.  It is a constant "give me the results of your hard work."  If you are using credit cards to pay off credit cards, you need to stop right now and contact a financial service that specializes in getting people out of this type of situation.  If you are not yet at this point, you can still help yourself.


You need to gather a years worth of your bills.  If you do not have them on file, that is just a sign of the denial you have been in when it comes to your financial problem.  Get online with each credit card and each monthly bill and get that information.

For each individual bill, figure out the average that you pay each month.

For each credit card, list the current minimum payment.

You are now going to go online and set up automatic bill payment for each of these bills.

For the credit cards, set the monthly payment to be equal to the current minimum payment.  Set this payment to continuously pay the same amount each month.

For the utility bills, set the monthly payment to the current average plus $5.  The idea here is to start building a credit with the  the utility.  This is so if you lose your job in the future, you will not have to worry about your utilities being cut off.

Take the utility bill that is the smallest and add $20 more to the average.  This is your focus bill.  Once this bill has 6 months of credit, you will continue to pay the monthly average plus $2.  This $2 helps to keep you ahead.  What about the other $23 you were paying?  Simply add that to the next smallest monthly bill.  Now you are paying that monthly bill's average plus the $5 your were already paying plus the $23 you are now adding.  When that bill is 6 months ahead, then do the same as before.  This time you will be adding an extra $26 to the next bill.  Once the utilities are all 6 months ahead, transfer the extra cash to the smallest credit card and continue the process.  Pay off the card and cancel it.

You will need to keep an eye on your monthly bills for at least the first 18 months.  During certain times of the year, you monthly bill will exceed what you are paying plus your built up credit.  This is to be expected.  Just make a manual payment each month to make up the difference.  In the winter, you will pay more for the gas bill.  In summer, more for the electric.  During the months when these utilities are not as heavily used, you will get ahead of them.

Many "Get out of Debt" programs focus on the credit cards first.  This is because this is real debt that is costing you money.  This program focuses on making sure you do not need to use a credit card and to give you real victories in your process of getting out of debt.  Each victory will be a positive step to keep you motivated.

What if I move?
That is a simple one.  If you have 6 months of credit on your electric bill, your electric company will send you a check for the balance.  Simple use your online banking to send that entire amount to your new electric bill.  That way you do not take any steps backwards.

How long will this take?
I have been doing it for 9 years.  I am anywhere from 3 months to 14 months ahead on my bills.  This is an investment.  Like all investments, it takes time, discipline, and patience.

How long should I keep this up?
I plan on keeping it up until I hit 24 months on all utility bills.  At that point I plan on opening a savings account and depositing the extra cash there.  One day I plan on retiring.  This savings account will help to make sure that I get to live my days in my own home.