It’s been a long, cold winter, and while you may have taken steps to reduce your heating bill, there is only so much you can do when the temperature is regularly well below zero.

One possible solution to your high utility bills:  Budget Billing.

Budget billing allows you to pay the same amount to your utility every month regardless of your utility usage.  Instead of paying whatever you owe each month, the utility company takes the amount you spent for the entire year and divides it by 12 to create an estimated monthly cost.   You pay the same amount every month, and then once or twice a year (depending on your utility company), an adjustment is made.  If you’ve underpaid, you’ll get a bill.  If you’ve overpaid, you’ll get a credit on your account.

Budget billing can really help you keep on budget if you live in a cold climate where heating bills can rise astronomically in the winter months, or if you live in a southern locale where cooling costs spike in the steamy summer months.

We’ve used budget billing for several years now, and budget billing makes it so much easier to plan our budget.  We know exactly what the bill will be each month which makes it easy to set up automatic payments from our bank account.   Sure, we end up paying higher bills in the summer months than we would normally pay.  But we also pay less in the winter, which is always a blessing during the holidays!

But budget billing is not for everyone.  You usually have to live at the same address for at least one year before you can sign up for budget billing services.  This helps establish the pattern of your usage so that the company can properly estimate your bill.  If you move around a lot – or if you have to travel a lot for your job and have erratic utility usage – budget billing may not be right for you.

You also have to be ready for that adjustment period.  Just like there are months during which you overpay, there can also be months in which you’ve underpaid.  You may have added additional family members, hosted numerous overnight guests or used more electricity for heating or cooling than you have in the past.  Most companies reconcile your estimated bills with your actual usage and adjust your budget billing every 6 months to a year.

It is possible, despite all of the best efforts to estimate what your budget billing should be, that you will owe a chunk of money.   Avoid the surprise of a big bill by regularly checking your monthly statements and discussing your payment options with your utility company in these situations.   Of course, if you’ve overpaid, you’ll receive a credit on your bill, which is always a nice surprise.  See if you can use that credit to reduce your monthly budget billing for the next year.

It’s a good idea to pay attention to your monthly utility usage even if you’ve signed up for budget billing.  A sudden unexpected spike may indicate a bad meter or a leaky toilet.  In addition, your monthly statement may come with energy-saving tips and information that can help you reduce your utility bill.

So if you’re struggling to pay an astronomical utility bill, ask your local utility company about their budget billing program.  It just might make a tight budget more manageable.