Budgeting is one of the best tools available for managing your personal finances.But it isn’t always easy to do, especially for expenses that are irregular. Household utilities are some of the hardest items to budget for, as they vary a great deal each month depending on the weather and your usage. Here are some tips for budgeting your utilities and cutting costs on some of those bills!
Budget Billing: Making Utility Costs More Predictable
Some companies offer budget billing, where they calculate your average monthly bill amount from the last year (plus inflation) and charge that as a set amount on each month’s bill for the next year, regardless of your usage. At the end of this 12-month period, if you paid less than the cost of your actual usage, you will be billed to make up the difference. However, if you paid more, the difference will be added as a credit to your account for the next billing year.
If budget billing through your company is not offered or does not feel like a good fit for you or your family, integrate the strategy into your own budgeting, instead. Think of it as do-it-yourself budget billing!
- Gather your utility bills from the past year and calculate the average monthly cost. Use this amount in your monthly budget. For months where you are billed less than the average amount, save the remaining amount to build a surplus for months you are billed more.
- Another way of budgeting utilities is to find the highest monthly amount. Use this amount in your monthly budget instead of the average and, again, use any savings from utility bills with a lower amount to save for higher ones.
Planning Ahead: Tips for Managing your Heating Bill this Winter.
With a budget in place, it never hurts to implement energy-efficient, money-saving strategies. For now, let’s focus on cutting costs on heating your home. While it’s nice weather now, Minnesota winter is fast approaching. Here are some easy, first-steps to prepare for the cold and save some money:
- Keep the thermostat at 68° while at home and at 60° when at work or sleeping
- Instead of turning up the heat when you’re cold, put on a sweater or sweatshirt
- Set the water heater to 120°
- Weatherize your windows using a heavy-duty, clear plastic sheet on a frame or tape clear plastic film to the inside of your window frames.
Money Management E-Newsletter: August 2017