I’m doing a few things to simplify my bill paying.
I just enrolled in the budget billing option for our gas bill.
We have a gas furnace, fireplace and water heater.
In the summer, our bill has been around $15-17/month since we’re only using the service for hot water. The bulk of the bill is “connection charges” and taxes — only $2-3 is actual gas usage! Pfft. Our highest bill last winter was $150, but it was a mild winter and I know it could swing the other way this year.
So, with our budget bill, we’re doing a flat $86/month. It’ll build a credit in these summer months, and accrue a deficit in the winter. In theory, it’ll all balance out in a year’s time but I can also make extra payments if it’s getting way out of hand.
I tried, in theory, to do budget billing myself. If you wanted to do that, you could assume the monthly charge would be $86 (in my case), see a summer bill of $17 and take the $69 difference and stick it in a savings account for later.
For me, the problem was it was too hands-on. I’d have to figure out the difference and manually move the money. It didn’t end up happening and so I knew I needed to find a way to automate it, hence the company’s budget billing program.
I also enrolled in our electric company’s budget bill for $112/month.
This next point is semi-controversial in the personal finance blogger realm, but it’s an option we’re taking.
For any monthly bill we can pay using our credit card, we are doing that. This includes: electric, internet, cell phone, Netflix and our dental discount plan.
Two reasons: We earn 1% cash back, and this consolidates a few bills into one bill and one due date instead of several.
This can get dangerous:
- If you can’t pay the credit card in full each month. We have a relatively low credit limit and our liquid savings greatly exceeds our credit limit. We don’t carry a balance.
- If you don’t review your bills monthly. Even though my cell phone bill is now being paid on my credit card, I still need to look at the phone bill to make sure there aren’t any weird charges.
Not all of my billers allow for a free payment via credit card. My gas bill charges a $4/month convenience fee, so I pay that bill using my bank’s online bill pay for free.
Some people argue that if the bill is paid via a credit card, it’s not “real” enough and you’re more likely to overspend. That’s a fair point. But my electric bill is going to be that budget $112/month unless the amount adjusts. My Netflix is going to be a constant. And so on. Over the year, the cash back will be around $36.
I’m not finished yet — I’m still looking for other ways I can further automate our spending and saving.
How do you streamline your bill payments?