The bills that change every month
Last lesson we handled the easy ones — the fixed bills, the ones that sit still every month and give you no trouble. Rent, the car payment, insurance if you pay it monthly instead of all at once. Those go on the legal pad and you basically never think about them again, except to check that they charged what you expected.
This lesson is the harder ones. The bills that move.
The power bill. The gas bill, if you heat with gas, which most of us up here do. The water bill — and I'll come to that one specifically in a minute, because it's got its own personality in Utah County. Groceries. Gas for the car. Anything where the number in January is not the number in July.
These are the bills that make people give up on budgeting altogether, because they think, "well, how am I supposed to write down a number I don't even know yet." And I understand the feeling completely. But you don't need to know it exactly. You need a number that's honest enough to work with — and that's a different job than being exact.
How you actually get the number
Go find your last twelve months of that bill. Most utility companies will show it to you online now — a little chart, twelve bars going up and down. If you don't have online access, dig through whatever paper you've kept, or call and ask them to read you the history. It's your account; they'll tell you.
Now, one thing to be careful about. You do NOT average the twelve months and call it good. Averages are exactly how people get caught out in February, when the heat bill lands seventy dollars over what they budgeted — because an average flattens the spike months right along with the low ones.
Take the highest month from the last year. Pad it up a little more if you like — five or ten dollars. That's your number. Remember what I told you about rounding: income down, bills up. This is that same rule, just applied to a bill that already moves around instead of one you're guessing at.
If your winter gas bill hit $210 in January and sat around $60 in the summer, you do not budget $130. You budget $210 — maybe $215. The months it isn't that high, the difference simply sits in your account and gives you a little cushion. The months it IS that high, you're not caught flat.
The water bill, specifically
I rebuilt our whole budget from scratch when Rodney and I moved to American Fork, because things I used to know cold — like what our water bill would do in July — I didn't know anymore. New house, new usage, and the water here is hard, so there's a softener running too, which means salt, which is its own little grocery-list item most people forget to budget for at all. Bags of softener salt aren't expensive one at a time, but they add up to a real line if you're buying them monthly and not counting it.
And the water bill itself swings hard here depending on the season, because outdoor watering in the summer is a different animal than winter usage. If you're on a tiered rate — and a lot of cities out here are — the more you use above a certain amount, the more per gallon you pay. That means your highest month isn't just a bit above your average; it can be a great deal higher. Pull your history and look at it honestly before you write any number down.
Groceries and gas for the car
These aren't utility bills, technically, but they behave the same way — they move around, and they're where money quietly disappears if you don't put a real number on them.
Let me bring up something I did years ago, my very first month running a real budget, sitting at the kitchen table with a legal pad because the checkbook didn't match and I was bound and determined to find out why. I went down that pad line by line, and the mystery turned out to be a magazine subscription Rodney had renewed and forgotten about. A small thing. Ten dollars, maybe twelve. But it taught me something worth far more than the ten dollars — the bills that get you aren't usually the big dramatic ones. They're the small recurring ones nobody's watching.
Groceries and gas for the car are the grown-up version of that magazine subscription. Nobody sits down and decides to overspend on groceries. It happens four dollars at a time — a quick stop here, a little extra there — and by the end of the month you're forty dollars over and you can't point to where it went.
My view on this, and I'll say it plainly: cash works better here than tracking apps do. An app tells you what you already did. Cash in an envelope tells you what you're allowed to do before you've done it. Pull out your grocery number for the month, put it in an envelope, and when it's empty, it's empty. It's a different feeling than checking a balance after the fact.
Putting it on the pad
Same format as the fixed bills. Write the category, write your padded number, and leave room beside it to write in the actual amount once the real bill comes. That gap between what you budgeted and what actually hit is not a failure. That's exactly why you track it — you're finding out whether your padding was enough, and if it wasn't, you adjust it next month. Recipe, not diet.
Before next time
Pull the last twelve months on your power bill, your gas bill, and your water bill if you can get at it, and write down the highest month for each one, padded a little higher. That's three numbers. Bring them next time and we'll add them to the pad.