Yahoo Finance Bill shock: 5 ways to take control of your expenses
No-one likes a bill, especially when you didn't see it coming.
The unwanted bill surprise can often leave you with reduced cash flow, especially if the amount is much higher than previous months.
This is likely to be the case for many Australians, who were consequently locked down in their homes for months on end, using more electricity and internet data than they generally would when out and about.
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Luckily, with a little bit of organisation and preparation, you can get on top of mounting debts and expenses.
To help those experiencing bill shock, here are five ways to better keep your expenses in check.
1. Budget, budget & budget some more
For many, bill shock occurs out of fear that you won’t be able to make the repayments as the amount owing is too high.
In order to eliminate this stress, harness the power of budgeting and ensure you account for a bit of extra cash in the kitty each month for when bills are a bit more hefty than usual.
One way to do this is to list out all your expected incoming bills and how much they generally cost, so you can allocate funds accordingly.
From here, you can then work out where you can cut down on unnecessary spending and build your “extra cash” kitty.
2. Cut down on debt
Living is expensive and chasing your tail can often leave you feeling like you are getting nowhere with getting on top of your expenses, especially when it comes to paying off debts.
Credit card fees can sneak up on us when life gets busy and we forget to make our repayments. When allocating your budget, try cutting down debt by working out how much you have left over each month and allocate payment plans from there.
This way you’re putting a stick in the habit of looking at the past and instead starting to look ahead.
Did you know there are 13,184,537 credit cards in Australia as of September 2021, netting a national debt accruing interest of $18.5 billion?
3. Lower household expenses
The most challenging part of expenses is how they can fluctuate based on seasonality. This definitely rings true for household bills.
Whether you’re cranking up the air conditioner in the summertime or leaving the heater on during cold winter nights, there are always price swings when it comes to energy bills.
To help keep this on track, it’s important to make note of your usage patterns and determine where you can cut down or make sacrifices.
Try switching off the power on the wall, as standby power is a key source of hidden energy use that can amount to more than 10 per cent of your household electricity consumption.
Or try doing your washing and drying outside of peak time periods (usually after 10:00pm through to 7:00am). It can have a huge impact on reducing your overall energy costs.
4. Implement bill smoothing
The goal of bill smoothing is to make budgeting simpler by setting up automated payments for businesses that you regularly get bills from.
Think bills like electricity, gas, water and telecommunications being paid in smaller increments and on a more regular basis.
You can set this up yourself by asking your utility provider to change your quarterly bill payments to monthly payments.
You can also download apps designed to give you greater control of your payments by providing automatic bill smoothing across their utility services to avoid any nasty bill shocks.
5. Track your progress
Finally, try to pay attention to your spending behaviour and track your progress each month. This will enable you to keep on top of your savings goals and lessen the shock of incoming bills.
Many financial institutions have made this process much simpler with their online-banking features, and there are plenty of apps available to help track and even incentivise you to do this successfully.
Overall, taking control of your expenses will eliminate worry and stress of the unknown. The aim of the game is to be organised and in control.
Alya Stephen, COO at Sorted Services.
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