Sep 01 2012

Using budget billing, and paying with credit cards to streamline bill paying

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?



5 Responses to “Using budget billing, and paying with credit cards to streamline bill paying”

  1. Have you heard of the frugal girl? It is not as much about saving, as just frugal living, but you might really like it. Love your blog.

  2. I put as many of our bills on our credit card as possible and then pay it off every pay day. I don’t have it set up to automatically charge though. I do go in each month and review each bill before charging it, but I do it for the credit card rewards. We got the Disney rewards card about 4 or 5 months ago since we would like to take the kids to Disney in the next year or two. We’ve already earned close to $100 in Disney rewards. I have an excel spread sheet where I track our bills and when I put something on the credit card I move the money over on the spread sheet so I know exactly how much I owe and I don’t charge if we don’t have the money to pay it off in full.

  3. Since starting the Dave Ramsey snowball thing I also track our bills in Excel. It has been great seeing the zero balances as I work down our list (only 2 left!). Anyway, I’ve automated all our bills. Most of them are paid thru our credit union online billing (free) and a couple others (like cable) are paid automatically thru their own online billing. The credit union online I have 1/2 payments coming out every 2 weeks since that is how my husband is paid. It works better for us that way we don’t have huge amounts coming every so often, it is the same constant amount each pay period.

  4. We do pretty much the same when it comes to bills. All utilities are billed to credit card via auto-pay, and then we also put all gas purchases on the credit card. In addition, any major purchase gets put on the card, too. We always pay the bill in full each month.

    Sometimes those bills get a little scary though…. it is definitely important to keep track of what you’ve put on there.

    Also make sure to update all the CC information on your auto-payments when the expiration date changes… been through that hassle and am vowing never to make that mistake again!

    If you’re disciplined, it’s a GREAT way to earn money on your purchasse. Every October, I cash out for either prepaid Visa cards or other gift cards and use it to do my Christmas shopping. It’s a big budget helper!

  5. we have a wyndham card and i charge everything on it that i can. bills, gas, groceries, everything. we earn points that i can trade in for maintenance fees which are $44 per month. I haven’t had to pay a fee in 14 months. thats a savings of $528. i always pay my balance in full at the end of the month. i go in on tuesdays and add up everything for the past week and transfer that to my savings account so i do not spend it. i pay my credit card bill from my savings. it’s work but it saves me money.

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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