Credit Cards, Debt, Personal Finance

A Life Without Debt: Simple Bill Paying

I went to visit a neighbor the other day and arrived as she was just beginning to pay her bills. It looked like quite a project, with all the papers spread and stacked on the kitchen table so I asked if I should come back later. She said no and invited me in to chat while she went through her bill paying routine. Now, I know that this neighbor has quite a bit of debt because she complains about it when we go for walks. But I never imagined how much it complicated her life until I witnessed this bill paying exercise.

While we talked she sorted everything into piles. She explained that one pile was the bills to pay now, one to pay later when more money came in, and one to completely ignore for now because she just doesn’t want to/can’t pay them right now. I didn’t say anything (although I really wanted to talk about the ones she was ignoring) because it’s not my business and just kept chatting about the weather and neighborhood events.

Once she got everything sorted (which took a good twenty minutes), she started paying. As I sat there she paid eighteen bills, mostly utilities, mortgages (first and second), car payments, and things like cable, phone, and Internet and a couple of credit cards. Some she paid online, but she wrote checks for more than half. By the time she had them written, stamped, addressed, paid, and recorded another forty-five minutes had passed. We were now over an hour into this exercise and she wasn’t done yet.

She picked up the pile of things to pay later and started prioritizing those. Most were credit cards, but some were insurance payments with later due dates. I counted nine more bills that she laid out on the table. She decided that she could really pay two more bills right now and wrote two more checks, stamped and addressed the envelopes, and recorded the payments. So we’re up to twenty-seven bills that she has to pay this month and, with this part of the process finished, up to about an hour and thirty minutes of time gone and all the bills still aren’t paid. She’ll repeat this process in a week with the remaining bills when more money comes in. I kept chatting, but inside I was thinking, “Holy cow, this is crazy.”

Then she looked at the pile of things to ignore. Thankfully there were only about six bills in this pile. It’s never good to ignore your bills, but at least it was only six. The way this process was going I was afraid it would be closer to fifteen. She looked at each one and sighed. Most were credit cards that I guess she was no longer using so she was willing to make them wait for money. She looked at me and said, “There’s just never enough, is there?” I murmured noncommittally and changed the subject. I didn’t want to say what I was really thinking which was, “Well, gee, if you’d reduce your debt and stop paying for crap you don’t need, there might be enough money to go around.” By the time she was finished and had everything put away, I’d been there for just over two hours. I figure she’s got at least another half hour or so to go next week with the remaining bills and then this process will repeat next month and the month after that. Her total number of bills for the month was thirty-three and that doesn’t count things that will come in at odd intervals like insurance, subscriptions, and trash collection (which around here comes quarterly or yearly, depending on how you pay).

This experience made me think about my own bill paying sessions. Because we’re debt free they are mercifully short. I counted: Every month I pay power, water, phone and Internet (counts as one bill because it’s bundled), one credit card (paid in full), and the security system. That’s five bills per month. It takes about fifteen minutes total because everything is paid online or automatically drafted. All I have to do is review the statements and make sure everything is correct. Twice a year I get my car insurance statement, but it’s automatically drafted. Once a year I get the home insurance and trash collection bills. These, too, are automatically drafted. Life insurance payments are drafted quarterly. Unless I take out a subscription to something or get billed for a medical procedure, I encounter no more bills. No car payments, no mortgage, no credit card bills, no bills for tons of services.

In a given year, I receive about seventy bills, counting all of my monthly obligations. My neighbor receives (at least) four hundred bills. I don’t even want to think about what she must pay in postage each year. I estimate that my total yearly time spent on bill paying is maybe four hours. My neighbor will spend almost that much each month. Being debt free and, not coincidentally, free from a lot of obligations and services means that very little of my valuable time is spent on this boring chore. It never stresses me out, as it does my neighbor. The money is there, the process is simple, and the bills are few. I’m free to spend my time doing something fun. My neighbor’s debt not only shackles her to her lenders, but it shackles her to that kitchen table for hours every month. It’s really a deal with the devil: You incur debt and buy a lot of “fun” stuff like expensive cars, toys, designer clothes, etc., and the payback isn’t always just the money you owe. It’s the time you have to spend paying the bills for all of your “fun.” Where’s the fun in that? It’s not a deal I’m willing to make.

When we think of the benefits of being debt free we tend to think of the joy of not owning anyone, the freedom we have to spend as we choose, the ability to build wealth and to provide for our futures. We don’t often think of being debt free as being a timesaver, but my neighbors’ bill paying ordeal showed me that the time saved by paying few bills is an unappreciated benefit of the debt free life. When people say they don’t have time to do the things they want to do, having a lot of bills might be one reason why. Which would you rather have: Three to four hours spent at a kitchen table every month paying bills or fifteen minutes spent paying bills and three hours spent doing something that’s fun and important to you?

10 thoughts on “A Life Without Debt: Simple Bill Paying

  1. That’s crazy!

    My system is more like ours. I counted and looks like 100 bills a year for us.

    Since I am so financially organized people often tell me they don’t want to spend so much time on their finances. Which makes me laugh since I really don’t spend much time on it – it’s automated and organized. I don’t need to set aside time in particular to pay my bills – it’s all done online with the push of a button.

    I don’t automatically draft much because it forces me to review bills as they come (and find mistakes, etc.). Though all of our savings is automatically drafted, monthly.

  2. This led me to review my bill paying spreadsheet, which I maintain in Excel. I have a section for the 1st & one for the 15th, because I pay bills twice each month.

    I have a total of 7 definite monthly bills – mortgage, water, phone, cable/internet, auto insurance & electric plus 1 credit card that is used to auto-pay alarm & newspaper. I have 4 other credit cards, 1 usually used monthly & paid off and 2 for specialty items at 0% interest (Home Depot & Best Buy).

    Homeowner’s & Flood Insurance & property tax are paid annually by my mortgage company.

    At most I pay 11 bills per month, including credit cards. All are paid online except the water bill, which charges a $2 fee to pay online, so I pay by check.

    It takes me less than 1 hour per month to pay bills in 2 sessions online, & mail the 1 check.

    Since I have everything recorded in my spreadsheet, I never miss a bill and never pay anything late. I’m very happy with this system.

  3. I always thought that just the prospect of huge debt would be overwhelming, but I can see how it’s even more debilitating if you have to face so many individual bills. Even when I had my own credit card debt, it was only the same two cards I’d always had, so no additional bills.

    Currently, I pay 6 bills monthly and then insurance at the half (auto) and whole year (renters). So about 75 bills a year. I probably spend about 1/2 hour a month paying bills and only that long since I have to reconcile my credit card bills with my check register. The only bills that are automatically deducted from my account are my loans (student & car). I’ve had to fight before to get other itemized bills corrected, so I never like giving companies money before I have the chance to review the bill.

    Anyway, wow. I hope your neighbor starts really making strides in getting their finances in order. Just the thought of 30+ monthly bills makes my stomach hurt.

  4. Great post. No wonder some people stress so much and talk about needing to sit down and “pay bills.” We have been on a spending plan since 2002 when we learned about Dave Ramsey. We have gladly watched the categories decrease and it takes a lot less time to plan our spending.

    Does your neighbor know your passion for personal finance? Just curious…


  5. Is all the extra ‘stuff’ worth the aggravation – I don’t think so!

    KISS – keep it simple sweetheart

  6. And here I was excited because I have now gotten to the point of paying another bill on line. It runs about $5 a year now just for stamps for One monthly bill! She has got to be spending a fortune on stamps even with paying some bills on line. I can’t imagine sitting down to that many bills every month/week!

  7. So why don’t you pay your utility bills annually? Why pay gas, lights, phone, cable etc on a MONTHLY basis? I do. That way, I only have to look at the bill once every 6-12 months.

    It’s not like you don’t know how much you pay on them annully. If you don’t know, you can call and get your annual bill for last year.

Leave a Reply

Your email address will not be published. Required fields are marked *