Clark & Washington

Avoid Utility Bill Surprises to Budget Better

The tighter your financial situation is, the more important it is to budget everything, including your utility bills. In most parts of the country, gas and electric can vary widely from month to month. Gas bills can double over a very cold snap and electric bills can be a fraction of the price when there’s no need for air conditioning.

Simple Solutions to Better Budget Utilities

There are some things you can do to better prepare for your utility bill so that you’re not surprised by the large number or suddenly hundreds of dollars under what you need to pay your monthly bills.

  1. Utility Company Bill Savings Plans. Most utility companies have some sort of a budgeting plan. The basic premise is that they go over your usage and charge you a monthly fee based on what you’re likely to spend over the course of the year. Enrolling in this type of plan will keep your bill at a set rate every month, which means it will be the same amount in the summer as it is in the winter, regardless of usage. Usually the company will audit the account every 6 or 12 months to adjust the rate if your usage is higher or lower. But those raises and decreases in payment won’t be as large as your monthly bill variable is likely to be when you’re charged for the straight usage every month.
  2. Budgeting Your Own Bills. Another idea, if you’d prefer not to enroll in the utility company’s plan, is to do the work to budget your own bills. What you’d need to do is get an accounting of your bill over a 24 month cycle. You’ll see a serious difference in monthly usage over the course of the year. Add up the total for one year’s service and then divide that by 12. Do that with both years separately so you can determine if that figure is an accurate assessment of what your monthly bill should be. With this method, you put aside that amount of money for your utility bill. In months where your bill is far less, save the extra money in a separate account to use when your bills are higher.

Utility bills can pose a problem for anyone because they’re very difficult to budget for in advance. Using one of these methods will better prepare you to meet your bills on time every month.

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