A fixed bill is easy to plan for. A bill that changes every month is not, and the usual response is to guess, then be surprised in the months the guess was low.
The fix is to stop treating a moving bill as a single number. It is a range, and it is much easier to plan around a range you have looked at than a figure you have imagined.
The method
Pull twelve months
Find the last twelve statements or bills for the one you are planning.
Find the low and the high
Note the smallest and the largest amount in that year.
Plan toward the high
Use the high, or something close to it, in your budget.
Set the gap aside
In the months the bill is low, keep the difference for the spike.
Check again
Once a season, look at whether the range has moved.
An example
An illustration only. Use your own twelve months.
Lowest month
- Amount
- $60
Highest month
- Amount
- $122
Midpoint
- Amount
- $91
Plan toward
- Amount
- $122
Set aside in a low month
- Amount
- $62
| Amount | |
|---|---|
| Lowest month | $60 |
| Highest month | $122 |
| Midpoint | $91 |
| Plan toward | $122 |
| Set aside in a low month | $62 |
Bills that usually move
4 things to do
Ticks are for this visit only. Nothing here is saved anywhere.
The spike month
The month the bill is highest is the month it hurts. Setting the difference aside in the cheaper months is a small sinking fund for exactly that. There is a fuller version of the idea in sinking funds explained. For the wider list of what falls due, see how to make a monthly bills list.