How to Deal with Those Annoying Fluctuating Bills

Budgeting

Sometimes the electric bill is $74.11, sometimes the electric bill is $102.48, and other months the electric bill is $56.89.

How am I supposed to budget when my utility bills are always fluctuating?

It’s not as hard as you think – and today I’m sharing the simple approach I use to manage fluctuating utility bills without stress. Whether you’re responsible for one utility bill or multiple bills, this system will work for you. I’ve even made a free template and training video for you so you can set up this system like a pro in no time.

It’s not as hard as you think – and today I’m sharing the simple approach I use to manage fluctuating utility bills without stress. Whether you’re responsible for one utility bill or multiple bills, this system will work for you. I’ve even made a free template and training video for you so you can set up this system like a pro in no time.

Here’s how the system works.

1. Find at least 6 months of past utility bills (water, electric, gas).

To get started, you’ll want to have six months of your past bills handy. A year’s worth of bills is ideal but at least six months will also do because you are able to capture a range of seasons and months.

2. Calculate the average amount you spent for each utility bill.

So, for example, if you had your last six months of electric bills, you would add up the last six months of bills and divide that amount by six. This will be the average of what you spent on electric in the last six months.

April May June July August September

$46.52 $36.48 $61.24 $74.38 $88.70 $62.93

Total Amount Paid: $370.25 Average: $370.25 divided by 6 equals $61.71

You’ll probably notice that the average is higher or lower than what you spent during some months and that’s alright! That’s exactly why it’s called the average. (No need to fear if you’re allergic to math – I was a math teacher back in the day so you’re in good hands!)

After you’ve done the electric bill, you will move on to the gas bill and so forth. If you only have electric, consider yourself blessed and move on!

3. Use the average of each bill to determine how much to set aside for each utility bill.

Stick with me! So, in the example above the average I spent was $61.71 on electric. For the sake of friendly numbers in my budget, I would commit to setting aside $62 a month towards electric each and every month.

I know what you’re thinking…But Keina! How’s that going to help me next August when my bill is clearly more than $62?!

Great question! When you have a budget, it should not be something you create at the beginning of the month and forget. It’s meant as a tool so you can account for money you have spent and proactively make decisions from week to week.

So, let’s say you’ve committed to this idea of setting aside $62 for electric but in October your bill is $39.06 (because generally electric goes down in the fall months!). You will pay your electric bill but still have $22.94 left based on your budget. I want you to save that $22.94 and either roll into next month’s budget for your electric bill or create a utilities sinking fund and transfer the excess.

This is the move that will give you peace of mind when your next $88 electric bill comes in the mail! Although you’ve only been setting aside $62 each month, you will have been saving the excess to account for fluctuating bills throughout the year. And you’ll have had a consistent number to work within your budget.

Remember the age-old adage about ants storing food for the winter? Well, if you follow this approach, you can consider yourself an ant!

Get started and don’t forget to grab the free template and check out the training video on this system here!

All the best,

Keina

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