How Do You Budget for Bills?

When you start to deal with your budget, you will find that there are a lot of little things that you need to do in order to put it together. Not only do you have to deal with random things like furnace repair in Burlington MA when your furnace breaks, but you also need to look at the consistent things that are in your bills as well.

First off, do not only use one month as a baseline. If you are living somewhere for an extended period of time and are not strained for money, use about 4-6 months. This will help you discover trends; see what months you use more of said bill than others, and to be able to calculate an average. If your electric bill is $25/month during the summer and you have electric heat, it will be more like $50-$75/month when it hits wintertime. Estimating December’s budget in July is going to do more harm than good.

Pay more than your minimum. If you pay more than the minimum on bills, you will get ahead of yourself for those months that the bill would have normally been above the minimum payment (note: most credit card payments do not give you a credit on the next month when you pay more than the minimum). Round up to nearest $5 or $10; pay what you budgeted for the month even if it’s quite a bit more when possible.

Don’t forget the Bills that aren’t monthly. Car insurance, water, sewer, trash, doctor and/or vet bills are rarely ever monthly. The last thing you need is to forget about these in a budget and all of a sudden have the bills come in the mail. That’s why it’s a good idea for you to go ahead and get things paid for early in case you get some unexpected things later on in the month.