Which is worse — parting with your cash each month or dealing with the annoying paperwork generated by a $19.95 cable bill and a $1,995 Visa statement? And just to make things drearier, if you fall behind on bills you can face late penalties, haranguing phone calls from creditors, and, in dire circumstances, termination of services. Here's how to master one of life's most tedious tasks.

Calling All Bills

Set aside two weekday hours (they can be spread out over a few days) for the onetime setup of your new system.

Make a list of all the bills you receive and their due dates.

Call each company and ask if it can deduct your monthly bill from your checking account or charge the amount to your credit card. If you're comfortable with automatic deductions (you'll save on checks, stamps, and time), then enroll in the plan.

If the company doesn't have an automatic-deduction plan, ask if you can change the date your bill is due.

Next, try to have all bills due on the same date. If that's impossible, group them so they're due in two batches each month.

Commit to a one-hour time slot once every two weeks (or as necessary, depending on your billing cycles) to pay the bills. Make it pleasant: Set yourself up at a cleared surface (the dining-room table, perhaps), put on background music (your chance to commandeer the stereo), or watch your favorite TV show (warning: This can slow down the process).

Five Easy Steps

1. SORT. When bills arrive in the mail, open them over the trash or recycling bin so you can toss envelopes and unwanted ads. Put bills (including bank and credit-card statements) with their return envelopes in the in slot.

2. BALANCE. On bill-paying days, start by balancing your checkbook to make sure you have enough cash on hand. Use your bank's automated phone service to find out which checks have cleared and how much money is in your account. (This is an opportune time to check your ATM receipts against your bank statement.)

3. PAY UP. First, record automatically paid bills (those deducted from your checking account) in your checkbook. Next, for the companies that allow it, charge your bill by phone to your credit card (unless you carry a balance). If you have a rewards program, you'll earn points or miles. For the bills you have to pay by check, subtract five to seven days from the due date, and write that date on the outside of the back of the envelope. That's when you'll mail it in. (Why give the company your money before you have to?) Put the envelope in the out slot. Write the date you're paying the bill (whether by credit card or check) on your statement in case questions arise later.

4. FILE. Once the bills have been paid, file statements in the appropriate pocket of an expandable file. Start a new file each year.

5. TREAT YOURSELF. "Reward yourself in a way that doesn't undermine your money situation, "says Olivia Mellan, coauthor of Money Shy to Money Sure, $25, www.amazon.com. Relax with a book, buy yourself flowers, or call a friend.