Hacking My Household Bills (aka how I balance my household budget without a budget)

Hacking Your Household Bills

I used to be TERRIBLE with my bills and my household budget. I was always late and ended up sending payments – often partial payments just to keep the lights on – in a panic before the power got cut off, or the cable got disconnected, or something worse. 

It just always seemed to be that when the bill came due, I either forgot about it. Or I was out of money. Or both.

Bill Due Dates

Allow me to play out the typical scenario for you… this was my life for MANY years!

The electric bill would arrive, and have a balance due on the 18th of the month. Because the 18th was WEEKS away, I would set it aside briefly and deal with whatever else was more pressing (aka due sooner).

The 18th would come and go and I would forget.

The second bill would come in, now owing TWICE as much money, plus a little something extra in “late payment penalties.” But, not currently having TWICE as much money available, I would set it aside, figuring I’d pay it after my next paycheck.

Then the reminder notice would arrive, with a VERY large balance due, and a warning that if I didn’t pay it within 48 hours, my account would go into collections and my power would be shut off.

In a panic, I would pay the VERY large balance due, taking money from everything else in the household budget in order to do so.

Then the second bill for one of the other utilities would arrive, now owing TWICE as much money… and so on… and so on… and so on.

It was a vicious budget cycle that I could never seem to break.

How to Hack Your Household Bills

But then I discovered this handy little household budget hack that has made all the difference.

And it’s really quite simple.

All I do is take my normal, monthly bill amounts, divide them by my pay periods and pay each of the bills a small amount every single time I get paid.

It was easy to set up with my online banking. My paycheck goes into my account and – that same day – my bills get paid and I don’t even have to worry about it.

Plus I now have a consistent amount of “leftover money” in my household budget that I can use for the rest of the household & life needs, including groceries, gas, etc. 

Setting Up Your Automated Household Payments

Setting Up Automated Payments

Setting up the payments is easy. All you do is divide what you need to pay by how many times you get paid. Easiest household budget process EVER!

For example, let’s say your electricity bill is $183 a month and you get paid bi-weekly.

Take $183 x 12 Months ÷ 26 Pay Periods and you pay $84.46 every time you get paid. But I also like to round things up to the nearest dollar, which allows for a bit of extra budget padding.

Here is a standard worksheet the covers most of the basics, but you always add your own expenses if something isn’t covered below.

ElectricityNatural GasCableInternetPhoneWater
Monthly Bill $183 $82 $ 107 $57 $29 $40
Annual Average $2,196 $984$1,284 $684 $348 $480
Pay Periods Per Year262626262626
Payment Amount $84 $38 $49 $26 $13 $18

With $228 out of each bi-weekly paycheck (or whatever your total turns out to be), you can cover all of the essentials and avoid having to payout hundreds of dollars in each year in late payment fees.

Balancing My Household Budget Was Never Easier

Balancing Your Household Budget the Easy Way

Just make sure you take seasonal ups and downs into account before you start. For example, if you’re starting in the Summer, pay the electric bill a bit more to cover the higher costs of air conditioning, and if you’re starting in the Winter, pay a bit more to the Natural Gas bill at first. It will balance out over time.

Of course, the above is based on the costs for an average family home. Your individual monthly costs will likely vary. And, if you can cut your utility costs by saving energy, you could reduce those amounts even further.

And – if your utility accompany offers this – you can sign up for online billing, so you can keep tabs on your balances online.

Online Banking + Small Installments = Happy Household Budget

Utilize Online Banking

That doesn’t mean that you never have to look at your utility bills again. It’s still important to check the bills in case you have unusual charges or – best case scenario – a large credit. (And, yes, this has happened to me!)

But it’s far easier to open up your electric bill and see “Credit Balance, No Payment Required” notice than it is to see a “Past Due, Payment Required Immediately” notice.

It’s not rocket science. It’s probably not even what the proper financial adviser would recommend.

But it works out for me, and if it works for you too…. then I’m glad I could help.

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