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Originally Posted by getforfree
Is it cheapper to use budget billing, or it's just good if you live paycheck-to-payheck. Sometimes i prepay my bill for 2-3 months ahead, to avoid spending time to pay it next month. All I have to do is to file it with the paid bills when I receive it.
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No, it is never cheaper to use budget/average billing, it just levels out the monthly payments. You're going to pay the same total dollars regardless of which way they devide up the payments. Budget billing also carries a potential trap: "Average" billing is normally based on your average monthly bill, expressed in dollars. But some "budget-billing" plans are based on your average consumption, in KWH or CCF, multiplied by the
current price per unit. When the price of gas or electricity shoots way up, such a plan actually increases the difference between your monthly bills instead of leveling them out.
Here is my "DIY Budget Billing" plan:
Part One -- I pick out the highest bill in the last 12 months for each utility, and I budget that amount for it
every month. That virtually insures I will have
too much money set aside for each of my utility bills. When a drastic hike in rates or an abnormally hot/cold month causes an absurd spike in one of my bills, I'm covered by the fact I've
over-budgeted for all of them. OTOH if things go as planned and the bills don't spike up, the money I over-budgeted for utilities gets swept into my emergency fund at the end of the month or used for extra debt payments.
Part Two: I set my conservation goals based on consumption (KWH or CCF, not $$$) because rate changes and so-called seasonal adjustments make utility bills jump up and down, but actual consumption (KWH or CCF) isn't effected by price changes and you can check your progress as often as you like by just reading your meter. I find reading my electric and gas meters once a week is a valuable 'reality check' that keeps usage from slowly creeping up and warns me when I'm not doing as well as I thought I was.
On the Subject of Phantom Usage:
If you really want to know what your phantom usage is, pick a nice day that requires neither heating nor air conditioning, read your meters first thing in the morning, and then spend the next 24 hours at a friend's house. When you come home, the new meter readings will tell you how much gas and electricity your house uses while just sitting there with nobody home.
When you do the phantom load experiment, it's a very good idea to include your water meter as it will warn you of any unseen water leaks in your house. I discovered a silently leaking toilet valve as a result of doing this test and seeing that my house used 5 gallons of water during the 24 hours I wasn't there.