Anyone pay their utilities annually or quarterly vs. monthly?

[Trying to get ahead]

I was wondering if anyone considered paying their electric, water, phone, cell, internet, etc. by the quarter (every 3 months) or annually.

[bjl584]

I don't think that is an option, at least where I live. The electric and water companies read my meters monthly and send me a bill accordingly.

[disneysteve]

electric, water, phone, cell, internet

Those are all services that are billed monthly based on usage. Quarterly payments aren't an option. I don't see why the companies would offer quarterly billing either since they'd have to wait a lot longer to get their money. From the customer standpoint, there's really no advantage either and it would make budgeting a lot harder.

[amastewa93]

Utilities aren't normally set up that way but you can pay insurance quarterly/annually. You can also pay for most of your entertainment costs that way as well (internet, cable, Amazon, etc). Usually, this winds up saving you a little bit on entertainment but it can save you quite a bit with insurance.

[scfr]

I was wondering if anyone considered paying their electric, water, phone, cell, internet, etc. by the quarter (every 3 months) or annually.

Is this something you are considering doing? If so, what is reason you are thinking about paying this way?

I pay the types of bills you mention monthly, but I can think of a few scenarios where I would personally consider paying quarterly or annually:

1. Discount: If I were offered a discount for paying more upfront, or charged more (ie, installment charges) for paying monthly, I would seriously consider paying quarterly or annually. I pay my auto insurance biannually to avoid installment charges.

2. Credit Card Bonus: I occasionally sign up for a new credit card to receive a bonus, and there is a requirement that I charge a certain amount within a set time period to receive the bonus. I would consider pre-paying something like my internet or cell phone bill by several months in order to help me meet the minimum spending requirement.

In Scenarios 1 & 2, there would be a financial incentive for me to pre-pay.

In addition, there are is one other circumstance I can imagine when it might make sense for someone to pre-pay. This one does not apply to me currently, but having once been someone who struggled with their finances I can imagine it:

3. If someone has a tendency to let money "burn a hole in their pocket" (spend it away as soon as they have it), or if someone is in a relationship with someone who has this tendency, getting ahead on monthly bills like the ones you mentioned might be a smart way to spend the money. Insuring that the bills have been paid in advance, and that services aren't going to be cut off (resulting in fees to re-start services), might be the way to go rather than risking having the money frittered away on unnecessary things. This could be an especially effective tool if someone has not only the tendency to spend all available money, but also has a variable income. If that is the case, then puttinging some extra money towards the electric bill when income is higher is not a bad idea. It could help you avoid having the power shut off when income is low.*

In Scenario 3, pre-payment would be an option to avoid financial pain later.

I know there are members on this site who would say that pre-paying bills is ridiculous, and that everyone should just have the self-control to pay their bills on schedule like robots. Personally, I believe that one of the keys to financial success is being self-aware. We all have weaknesses. I applaud anyone who recognizes their weaknesses (or their partner's weaknesses) and comes up with creative ways to deal with those weaknesses in a positive way. If someone works in a seasonal business and has a spender personality, and chooses to "spend" when income is good by pre-paying their monthly bills to insure that they don't fall behind when income is low (or just buying non-perishable groceries so no one goes hungry later), I say bravo to that. Or if someone who has often fallen behind on their bills inherits some money, and they spend the inheritance getting ahead on their bills instead of spending it all on something like a fancy vacation, I say bravo to that too.

[Joan.of.the.Arch]

Not me. However my husband did go ahead and pre-pay some of our bills years ago when we would be traveling in the summers. That was before online paying. Heck, it was when the internet was still pretty rudimentary.

But this brings to mind someone on this forum years ago said that they pay their real estate taxes two or three years worth at a time, so that in at least one of those years they would have a large enough "local tax" to itemize on their federal income tax. It looks like that advantage might be going away if proposed federal tax changes are made.

[Trying to get ahead]

Reason I asked is because we recently went from a steady two-income household to a variable income (one of us). I was looking at creatively staying ahead of the bills.

In our town, the power bill has a budget feature where they examine your usage for the previous year and average out your monthly bill so it is the same each month.

We have a cell phone plan that is a flat $30 per month per line (unlimited everything). We do not have cable television.

I pay my credit cards each payday (every 2 weeks).

[scfr]

Reason I asked is because we recently went from a steady two-income household to a variable income (one of us). I was looking at creatively staying ahead of the bills.

In our town, the power bill has a budget feature where they examine your usage for the previous year and average out your monthly bill so it is the same each month.

We have a cell phone plan that is a flat $30 per month per line (unlimited everything). We do not have cable television.

I pay my credit cards each payday (every 2 weeks).

Great to be creative and plan ahead to eliminate (or at least minimize) the odds of ever falling behind!

There are a several ways you could approach dealing with the transition to one variable income. Here are a few that I know of. (I'm sure there are others.)

1. Pay ahead on the bills, as you have already mentioned. Nothing wrong with this approach!

2. Adjust your spending so that you can live off of the the one fixed income. This might mean scaling back to a bare-bones budget. The variable income would be used for "extras" (food other than a rice & beans diet, entertainment & gifts & donations, travel, etc.).

3. Look at the past year's spending and estimate what spending will be in 2018. (For example, if your average water bill is $50, you might allow for a 10% increase and estimate it will be $55 per month in 2018. Then, starting on Jan 1, set aside $55 per month for the water bill. Sometimes the bill will be lower and sometimes it will be higher, but as long as you set the money aside each month, don't spend the money on something else, and the average bill is not higher than $55, you will always have the money to pay it.) This one requires the most discipline and level of record-keeping. There are a variety of ways the money can be "set aside" (separate bank accounts, envelopes, lines on the spreadsheet, etc).

Which approach you take depends on which one you can imagine yourself successfully using. Don't let anyone tell you that only one way is the right one. The most important thing is that it's a system you and your partner will actually use and be able to stick with.

Please let us know if you have any more questions.