Easy Money Tip: Reducing Bill-Paying Panic

working mom

Last night I got home late from my photography class, checked my email, and saw a utility bill statement that had just been sent out.

I paid it, then promptly got up, walked across the living room, and turned down the heat.

I love to be warm, but I find myself perpetually freezing.  I’m cold in my office at work, I’m cold in my house, I’m cold when I’m out running errands.  The only times I’m warm are when I’m under my toasty comforter in bed or driving around in my car (alone) and can crank the heat to high and turn on the heated seats.  {If anyone else is in the car with me, they’ll complain that it’s too hot.}

Over the holidays I had quite a bit of time off, plus I started working three days a week so the house was occupied more often than usual.  When I was home, I turned the heat up.

We expected a large heating bill, and it didn’t disappoint.  It was fantastically high.

And though looking at the total was a bit eye-popping, it wasn’t panic-inducing.

We were prepared.

We plan for these bigger bills by breaking them down into smaller, bite-sized pieces each month.  We have dedicated savings accounts for some of our larger expenses so we can save over the course of a few months for those bills.  I’ve gone over our past utility bills and added up what they cost over the course of a year, then divided that total by 12 to come up with an average monthly utility amount.  Each month I put that much money (plus a few extra bucks just to keep it a bit padded) into a separate savings account.  When the bills roll in every 2-3 months, I just pay them from that dedicated account.  The account grows during the low-cost summer months, which balances out the high-cost winter months.

We do the same thing for our semi-annual car insurance premiums and annual life insurance premiums.  It saves us hundreds of dollars each year to pay ourselves monthly, but pay the insurance companies in full when the bill comes.

sinking funds

We’re also saving monthly for our 10th anniversary, and I just started saving a few bucks a month towards next Christmas.

It’s so much easier to pay bills when you’ve already set the money aside in reasonable monthly amounts, rather than trying to squeak large payments into the budget.  No more bill-paying panic!

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