Bills, bills, bills

can you pay my bills
can you pay my telephone bills
can you pay my automo’bills
then maybe we can chill
I don’t think you do
so you and me are through

Well, things might work that ways in the realm of Destiny’s Child, but in my world, we pay our own damn bills! So how can you do it with a minimum of stress? This is what works for me.

One evening in 2002, while planning my wedding, I realised I was finding it hard to balance wedding saving with the stuff that gets in the way. You know, a car rego would fall due just when I wanted to put a deposit down for our reception. Or I’d have a big phone bill that was going to cut into wedding savings. I had already steadfastly calculated how much we needed to save to have our wedding paid for outright, and then it was just a matter of dividing the total by the number of remaining weeks. But that doesn’t work if you suddenly need to see a dentist urgently.

So how to manage my bills into easy expected and manageable chunks? I tried to think of all the monthly or annual bills I could expect in the coming year. Then I assigned a dollar value to them all. Some I had a fairly good idea about ie by averaging my most recent phone or electricity bills. Others – such as car repairs or dental expenses – were a total guess. I did not include credit card or loan repayments, or even rent, as these were weekly and I did not want them to be thought of as `just another bill’.

When I added it all up, I was shocked at the total, and the amount I needed to save each week to pay these bills alone. I think the total was something like $12,000. That necessitated me saving $230 each and every week. It seemed like such a lot of money. How had I been paying these expenses before?

Well the answer was that I would end up having to put things on my credit card. Or have a big week or two with one big bill paid but no fun money and no other bills paid. So I was often just paying the bill a little late, or cutting things fine.

Once I thought about it, that weekly amount wasn’t so bad. It eliminated all the fear I had about what was around the corner. I made sure to include $1000 for Christmas expenses, likely (and unlikely) medical expenses, every phone and utility bill, student expenses such as text books and union fees, car repairs, registrations, insurances … and on and on. This means I never freak out anymore when a big bill arrives.

The biggest problem was getting it right. I didn’t think of half my expenses on that first attempt. It took a while to think of everything, and even then I would budget too much for one non-fixed bill, and too little for another.

Six years on and my weekly billpaying amount hasn’t changed much. It’s still only $235/week. However, the categories have adjusted to reflect changes in our living situation ie shared bills with my father in law. Probably one disadvantage of this system is that you tend to get a little blase about reducing your bills, because `you have the money ready anyway’. That’s not a good approach and I intend to rectify this soon.

So some bills are on autopay, and others I’ll pay by manual direct debit. Sometimes I’ll pay for sometjing on a credit card then transfer the balance immediately from the billpay account. It generally works. When I do occasionally find that a bunch of bills fall due and there’s not quite enough in the billpay, it doesn’t take much to cover the excess, but this is rare.

I’ll finish up with a complete list of the items included in my billpaying account:

  • Car registration, repairs and insurance
  • Automobile association membership – for towing and roadside assistance
  • Boat insurance – I should include the service costs – see, I have room for improvement!
  • Private health insurance
  • House contents insurance
  • Life insurance (husband) – I’ll need this next year when I earn a decent income
  • Mobile bill x 2
  • Home phone
  • Internet
  • Electricity
  • Pharmaceuticals – a fixed fortnightly expense for my husband
  • General medical – appointments, new glasses, dentist visits
  • Internet security (McAfee) – an annual expense
  • Printer cartridges – always a pain, always expensive
  • Christmas – for presents, food, alcohol etc

There’s a million more items I could add but I find this takes care of the big stuff and fights any feelings of panic when I see that the mailbox is full. I hope you find a system that works for you. If you have one, please share it!

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3 Comments »

  1. tehnyit said

    Good to see that life insurance made it on the list. How about life insurance for you? In terms of insurance, should you also consider income protection insurance?

  2. debtfretter said

    Hi tehnyit! We are waiting for me to become a (fulltime) income earner to get life insurance (next year). I think income protection insurance will also be a must for me, but we are going without just at the moment as there is some attached to my husband’s pension plan.

  3. evjam said

    I’ve been enjoying your blog history. I too have a bill paying system which I’ve used for nearly 15 years. I keep track of actual expenses each financial year and then calucaluate how much is required each fortnight to achieve this. I find I need to increase the amount per fortnight each year (to allow for increasing costs). (Guess where the recent tax cuts went!!). Like yourself, about once a year this system comes up slightly short, but only needs a small amount to be found. Currently I’m interested in maximinising my mortagage payements, (my only debt) but I am frustrated with a years worth of private school fees still left to pay for my son to complete his final year of school. Like yourself, it is sometimes hard to see the forest because of the trees – There are so many things that keep coming up that need to be considered and addressed, it can be hard to stay focussed. Thank-you for sharing your journey.

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