In our house, we have a gas fueled furnace for heat and an electric fueled central air unit. So, as you can likely deduce, our gas bill is much higher in the winter months and our electric bill is much higher in the summer months. But, our bill hardly ever fluctuates. Why is that? We’ve got both bills set up on a little budget helper called balanced billing. It’s a lifesaver when it comes to doing a budget, and it offsets those peak months like the Money Beagle just had.
How does it Work? It’s pretty simple really. The gas/electric company takes our bills for the last year and adds them all up and then divides by 12. That’s our bill for the month. With the gas company, it adjusts each month, so we’ll see a variation of up to $10 or so dollars each month. And with the electric company, they adjust once a year so we usually end up with a little bit higher bill (about $20) for one month to make up for any difference and then it’s back to where it was. I highly recommend it.
How is Balanced Billing a budget helper?
Here’s a little anecdotal story to cement the need for such a program. When I was still in college, I lived with 4 other guys in this awesome old house. It didn’t have air, so it was warm in the summer. In the winter, it had a gas fueled boiler that fed those old registers in each room. The first winter we lived there, our typical gas bill up to that point had been about $200. Not bad when you split it 5 ways. Then we had a particularly cold November. Our bill in December was over $650! Obviously, it was a bit of a shock to us when our heating bill was more than the rent each month! Luckily, we were all pretty good friends and a couple of the guys floated the rest of us some money to help pay for the bill. But, imagine what would have happened if that had happened to a family that was living paycheck to paycheck? Even if you aren’t living paycheck to paycheck, imagine what that would do to your budget!
And that, my dear readers, is why balanced billing can be such a wonderful budget helper. If you’re interested, it usually just takes a quick phone call to the utility company to get it set up.
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We do this for our electric bill, and somewhat for our oil bill. We have window a/c, so our electric spikes in the summer…..but spreading it out over the year really helps.
Oil…we “prebuy” our oil to get a cheaper rate, and then it is spread out over the year. Back in 2008 when gas and oil prices were high….we were paying $517 a month, on the budget!! If we had done the pay as you go….oil was almost $5 a gallon….and with a 275 tank….one fill up would have been $1375!!!
I’d never heard of balanced billing before but it seems like it could be quite revolutionary for our finances. It’s something I’m definitely interested in especially after reading your story. It really helps if they can average out the bills so that the fluctuations aren’t too drastic. Very crucial for a family that is on a budget.
I’m thinking of doing this. Good to see that it works well for someone.