As some of you know, I keep track of various expenses as part of my monthly/annual budgeting. I mostly post about my monthly grocery budget, but there are 16 main categories in my monthly budget; some with subcategories.
One of the main categories is Utilities, with the sub-categories of Water & Electricity (one bill, which also includes other municipal charges such as sewage and trash collection), Natural Gas, Telephone/Cell phone, Internet/Cable.
I get the water and electricity bill once every two months, but I average out the bills to come up with a monthly amount (of $150/month) for budgeting purposes.
The natural gas bill is received monthly.
I use natural gas for heating, cooking, the clothes dryer, and water heater. My bills vary with use, of course, with a sharp increase during the colder months, since I like to keep the house toasty warm.
But I average the previous year's bills and use that average for my monthly budgeting purposes, carrying over any surplus from the summer months to pay the higher winter bills.
I used to budget $65/month for gas, but increased prices and being home more due to working from home after the cancer treatments began (ah, I can't really keep the health factors from creeping in to my posts, can I?), I found myself using more gas, especially for heating during the winter. As a result, based on the previous year's bills, I have been budgeting $100/month for natural gas.
I just received my August natural gas bill and I thought I should do a mid-year (sort of) check, looking at a year's worth of bills, from August 2016 to August 2017:
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Monthly Natural Gas Bills – August 2016 to August 2017
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August 2016
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$16.69
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September 2016
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$19.78
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October 2016
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$26.14
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November 2016
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$33.10
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December 2016
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$161.59
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January 2017
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$250.78
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February 2017
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$185.03
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March 2017
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$153.43
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April 2017
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$64.57
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May 2017
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$55.44
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June 2017
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$29.47
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July 2017
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$17.67
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August 2017
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$15.85
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Total Spent
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$1,029.54
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Monthly Average
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$85.79
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I've budgeted $100/month (or $1,200/year) for the natural gas and my averaged monthly gas bills have amounted to approximately $86/month (or $1,032/year). Looks good, right? I've a balance of $168 in the account!
If I was to look at only 2017's budget, at $100/month, I would have $800 budgeted, till August. Adding up only the bill amounts from January 2017 to August 2017, the bills have amounted to a total of $772.24. Still looking good!
However, this type of budgeting only works if one carries over the balances from one year to another. If I was starting out January with just $100 in the budget for the natural gas bill and receive a $250 bill, then, obviously, I will be $150 in the red, right from the start! And that deficit will continue, and even grow worse, from month to month for the first several months of the year - until the incoming monthly bills go down in the summer months. Until August, actually, as one can see from the table below, which uses last year's bills (shown within brackets) to estimate the bills for the rest of the year!
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Month
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Budgeted Amount
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Billed Amount
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Balance
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January
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$100
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$250.78
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-150.78
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February
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$100
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$185.03
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-235.81
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March
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$100
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$153.43
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-289.24
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April
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$100
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$64.57
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-253.81
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May
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$100
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$55.44
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-209.25
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June
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$100
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$29.47
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-138.72
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July
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$100
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$17.67
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-56.39
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August
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$100
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$15.85
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27.76
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September
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$100
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($19.78)
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(101.62)
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October
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$100
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($26.14)
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(175.48)
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November
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$100
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($33.10)
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(242.38)
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December
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$100
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($161.59)
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(180.79)
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Totals
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$1,200
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$1,012.85*
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$180.79
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Assuming the rest of this year's bills will remain the same as last year's bills for those months, I should be able to end the year with almost $181 which I will carry over to January 2018, to which I will add another $100 to January's budget, which will give me almost $281 in the budget with which to pay January 2018's bill. I might be in the red, again, next February, but I don't think I'll have quite as high a bill next February because I won't need to heat the house as much during the day as I would be at the office.
Once again, I am well aware that this type of budgeting can only work if one has enough of a cushion in one's account to absorb those higher bills at the beginning of the year. It can be a bit misleading, but I like it in that it allows me to budget a certain set amount, each month, and it all averages out over the year.
My natural gas company sends me a weekly bill tracker email, showing my current gas bill amount (since the date of the last billing), the number of days since the last billing date, the number of days till the next billing date, and the estimated amount of the bill based on my gas usage history. They also include the previous month's bill amount and the amount of the bill for that month in the previous year. For example, in the last week's bill tracker, the previous month's bill (for July 2017) was $17.67 and the bill amount for the "same month last year" was $17.33. Technically, I can use that bill tracking system to modify my usage, if necessary, especially if I feel I will go over my budgeted amounts.
I can also lower my summer natural gas bill by turning off the pilot light for my space heater. But I like the convenience of being able to turn on the heater at a moment's notice, if there is a sudden cold spell, without having to wait until someone from the gas company can come out to relight the flame, etc. And, of course, I could economize more in the winter by setting the thermostat lower, improving insulation, bundling up, etc. But, a warm house in the winter is my one indulgence. I will happily forego the air conditioning in the summer, but I want a warm house in the winter, especially since I tend to feel cold, quite easily. I consistently go over the 1st tier/recommended level of gas usage in the winter. I am well aware that I am blessed to be able to do so.
I am using my natural gas bill as an illustration, but this is really how I budget for most of the categories on my monthly budget.
Do you use natural gas for heating, cooking, etc.? How do you set up your monthly budget? What is your indulgence?
You have a clear understanding of your actual expenses and your system works. The end result is some what like budget billing. I much prefer receiving a bill for the actual charge.
ReplyDeleteWe use gas for cooking, heating water and heat. We supplement our furnace with a fireplace in our family room that burns logs. We have a large stack of logs that my hubby cut from trees (ours) and friends. So the cost was in labor, time and fuel for his chain saw. I am the opposite of you and much prefer my air conditioning to excessive heat. When I first came to this country I couldn't believe how hot some people kept their homes. We did not have central heating when I was growing up and it often was quite cold in school so I expect I was used to it! Of course that has all changed.
You feel much like a pen pal so I don't mind answering your questions. For many years we have gone to San Diego for Thanksgiving. Last year we missed due to ongoing medical issues. I am grateful that we can return this year. Yes we have over the years visited all the tourist sites. The weather is always much better than the Midwest. As long as we are able we continue to travel to visit each of our sons, one on the East coast and the other on the West coast. We don't have to travel so far to visit our daughter.
Hope you are having a lovely Friday evening.
Sandy, I appreciate you answering my questions. I was in San Diego with my half-brother (the one who recently suffered a stroke) one Christmas when I was on holiday from Wisconsin - it was in the minus 20s with the windchill factor, when I left Wisconsin and in the 70s in San Diego! It felt like summer to me!
DeleteI hope you continue to be able to visit both sons for many years to come. :)
I am having a good evening, thank you. My aunt called me earlier in the afternoon to say she might not visit tonight, after all, as she's tired, and not to cook, so I am just taking it easy! I had the last of my friend's rice and curries for lunch, so a light dinner of a corned beef sandwich or scrambled eggs on toast sounds good to me.
My head is spinning after reading your calculations ...I knew that would amuse you since you know what a non-numbers person I am. Haha! Another reason why I admire you so, Bless! :)
ReplyDeleteHa, ha, Carolyn! I should have been an accountant! I'm a closet bean counter, that's what I am!
DeleteI do the same as you with all my utility bills. However, I don't have the problem of having to use last year's surplus since the start of the calendar year coincides, for us, with the months when our electrical bill is the lowest of the year. So we have a few months to start building the surplus that we need in the summer months, when AC usage is 24/7. At the end of the calendar year, I usually take whatever surplus and assign it (in my spreadsheet) to another "bucket". In the past, it's paid for trips to France, home repairs, etc. Our water bill doesn't change much from month to month anymore since our household is getting smaller and I've started collecting rain water for the garden. I could, theoretically, lower my budgeted amount, but I've always overly cautious with money so I'd rather have a surplus at the end of the year than scramble to meet a bill, you know? Plus I like the extra cushion in my checking account throughout the year as I don't budget for every eventuality so "unexpected" expenses, such as eating out (ouch, definitely our main splurge), crop up.
ReplyDeleteOur utilities are all billed monthly: electricity, water/sewer/recycling (all on one bill), internet and cell phones.
I wish our electrical company sent us the weekly emails about our usage, like your gas company does! Maybe it would spur us to be diligent about the power vampires that we have. I would say that we're definitely indulgent with the electricity we spend, although we were told that we use far less electricity than most people in a similar sized home (and that was back when we still had the 6 kids at home!). We do keep a lot of electronics plugged in at all times because it's too inconvenient to unplug them and we have few outlets (old house!) so power strips end up being hidden behind or under furniture anyway and I keep night lights in the bathrooms, kitchen, and the upstairs hallways because I have poor vision and don't want to break my neck at night. We have LED bulbs in most places (CFLs in others), keep the light off as much as possible, have installed new windows.
Now that my daughter has moved to college, our AC usage will be lower since her bedroom has little to no insulation (and no way to add any) and we had to run the AC on a lower temperature on that side of the house just for her. Luckily, it's the only bedroom on that side of the house so I'm able to raise the temperature on the thermostat without inconveniencing everyone else. As we've gotten older, Greg and I can't stand the heat in our bedrooms as well as we used to, so now we have the AC set at 74F whereas in the past we suffered at 76/78F! I always chuckle at your needing to be "warm" (for me it's HOT!) all the time. Maybe you should move back to Florida, Bless. You could be hot all the time FOR FREE, live near me and I'd come eat all your leftovers and give you pineapples :)
Ha, ha, Nathalie, that move to Florida sounds pretty tempting! Sounds like you've got a good system going with your bills, too. I suppose I could budget more for the months when the gas bill is high, but, I figure it balances out in the end. I just keep enough of a cushion in the checking account to cover it all.
DeleteHello my friend! I am just the opposite of you, I would rather have a cool house in the hot months and just keep the thermostat lower in the cold months. ;) Luckily for me I keep the thermostat turned down (about 62F) at night when I sleep and bump it up to about 65F during the day when I am up and Jeff is sleeping. Once he gets up though, I have to bump it up to about 68F. We heat with wood pellets and the cost of the electricity to run the pellet stove in minimal. I think we see about a $20 a month increase in our electric bill during the colder months but most of that is because of having the lights on in the house more.
ReplyDeleteDebbie, I'd have thought you'd like it warmer because you are from Hawaii! I have a gas wall heater unit in the living room; the rest of the house gets heated as the heat diffuses, but it is not a very efficient way of heating the house. The living room can be toasty warm but the family room and the bedrooms can be cold. Last couple of winters, I just sat right in front of the heater, all day! I felt so cold!
DeleteLove your budgeting.. Great idea.
ReplyDeleteWe heat, cook ,hot water tank, cool with electricity.SO, it is our main source of heat and cooling. However, we do have a butane gas tank that we keep filled. We have some space heaters that we use in the really cold winter days to help the heating of the house. I budget $200 month for electric bill, water bill . This is more than we have needed [just living in this house for a little over year, we are in the learning stage, of expenses]. I leave the remainder of the left over money in that account.. This way, at the beginning of the year, I have a surplus to start off with.. We will be able to tell this year, if we need to lower it or raise it??/ Our water is very reasonable.. It is $12-$14 month and in the summer when we water garden, grass, etc.. It will go to $30..
The gas tank is pretty expensive to fill up.. so we have it topped off every month during the winter months.. Never let it run out. This is separate account.. as we didnt know, how much or how expensive it would be..? We are still in the learning stage, of this house, and I am having to change my budget from my other house, which I live in for 35 yrs. Really hard .ha
Judy, I am envious of your water bill! The space heaters is a good idea. I used to have one that I moved from the family room to my mother's room at night, but it malfunctioned and I never replaced it. Now, with the cat walking about, I am afraid to have a space heater, in case he knocks it over or gets his fur singed! Good idea to keep tabs on your bills in the new house for a year or so and make adjustments as needed. I monitor my bills mid-year or so, just to keep track.
DeleteOf course we are opposite here in the frozen north [minus 30, wind chill factor can take us to minus 90]. Long standing, natural gas provider's budget system is very efficient. They work out average natural gas jigijoules [measurement] based on square footage of dwelling, divide the sum by 12 and clients must pay stated amount by due date or penalties are added. [anyone regularly delinquent is required to leave a 3 months deposit as a 'draw.'] If they cut off heat, a wickedly expensive 'reinstate fee' is added and no heat adds frozen pipes with potential to split adding water and sewerage to the list of expensive problems.
ReplyDeleteOverpaying in warmer months evens out colder months when high need makes bills soar. Natural gas is inexpensive but administrative fees and all manner of tax gets us all hot under the collar. The statement whether by snail mail or electronically details exactly how much product was used, the daily rate, and dates covered. A chart links current 'jj 'use to previous year. The bill for August shows we used $ 1.16 of natural gas but administration, delivery, land tax, municipal fees, provincial fee, tax 1,2,3 added around $ 66. In the coldest months rates are much higher. Monthly automatic withdraw is $ 71. and I usually have an 'adjustment' in October. About $ 850 for 2017.
I bought shares in the publicly owned Natural Gas company to benefit from my expense.
Hon, that's very wise of you to buy shares in your gas company! Our bills, too, give a lot of details - what was used, rate per unit, etc. There is a recommended amount of usage that is billed at a certain base rate; anything over and above that is billed at a higher rate. I pay the exact amount of the bill each month, but for budgeting purposes, I average the bills.
DeleteI wish that we had natural gas available to us, but we don't. We cool with electric and heat with oil. Like Judy, we are still on a learning curve as to what our expenses are here.
ReplyDeleteElectricity and oil can get expensive. That first year in a new house can be difficult to budget for. One can only go by the previous house's budget and add 10 or 15% more (depending on how much larger the new house might be) and go from there, I'd say.
DeleteDitto on what Hon Min has said. I don't know which province she lives in, but here in Ontario I am also on the equal billing plan. I budget $160 per month for my natural gas (heat and hot water tank). I loved this post because it made me think really hard about my gas budget. I tried to go on-line to my account on the weekend and discovered I had been frozen out, so I had to wait until today (Monday) to call the gas company to reset my password. They have owed me money every month for the past year. They set my equal billing in October last year to $132 a month, but because I had been paying $160 for the previous year and I was budgeting for it, I kept paying the extra money. By April I had a surplus of over $500 (and that was after the winter heating months.) Apparently they raised my equal billing to $186 a month in April but I didn't notice and kept up the $160 a month payments. How does the company figure you need to pay more when they owe you $500 plus? Anyways, I still kept paying $160 a month over the summer. I will be going into the winter season still with a surplus. If in October, they lower my equal payments, I will still carry on paying the $160. It scares me to think that my billing went from $132 a month to suddenly $186 a month. That would cause me a hardship. That is a huge jump. Good thing I had a surplus.
ReplyDeleteSusan, definitely a good thing you had a surplus and could keep your monthly payments to $160! Did the gas company tell you why they increased your monthly billing? Did your usage suddenly go up? Or is it because the rates went up? I find that my usage tends to remain more or less constant for that time of the year from year to year, but the rates fluctuate.
Delete