How Do Utility Budget Plans Work?
When I was a working woman with few budget woes, I always paid my bills as they came because I had the money available (oh how I miss those days!!). Things changed after I quit my job almost 2 years ago to stay at home full time with my daughter. I obviously had to find a way to cut back on any little thing that I could to minimize the pain of reducing our income. One of the first things that I did was contact my electric and natural gas companies to inquire about being put on a budget plan; because our new (and tighter) budget had little room for surprises!
How do Utility Budget Plans Work? Basically your yearly utility expenses are averaged over 12 months. For example, if you pay $1080/year for electricity, your monthly bill on the budget plan would be about $90/month. While this might pain you in the winter time when your bill would typically be around $20/mo (as an example), it is a welcome relief in the summer time if your bills top $100 or more!
So what else should you know?
- Anyone can sign up for a budget plan. There are no income restrictions, and enrolling is free.
- Budget plans help take the pain out of seasonal fluctuations and allow you to have more money in your pocket around the holidays…when heating costs are often higher.
- You will have to reconcile your account at the end of the budget year based on your actual usage. For some, that means a higher bill at the end of the year. For others, that means a smaller one. It has been my experience that my last bill of the year is usually slightly lower or right on target. The utility companies seem to do a good job of adjusting your amount slightly as the year goes on in order to compensate for your actual usage.
- You should be able to sign up any time.
- Check out your utility company website for details about how things work in your area. I am writing this post based on my personal experience, and plans could vary based on where you live and which company provides your service(s).
I have learned over the last few years that being in control of our family finances (or at least knowing where the money is going!) is a huge relief to me. It is hard to have goals and work toward them if you don’t know where you currently are, and how you plan to get there. Utility budget plans are one of the many things that have worked for me when creating a budget for our family.
What are your thoughts? Do you use a budget plan for your eligible utilities? Are you afraid to sign up? Please share your thoughts in the comments section!
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- 6 Ways to Save Money on Your Electric Bill
- Do Energy Audits Save Money?
- 6 Tips for DIY Winterizing Your Home
- Frugal New Year Resolutions | 10 Tips to Get you Started