How to Budget for Bills That Change Every Month
By Cedar & Ledger
Rent stays the same, but the electric bill doesn't. Utilities, gas, water and some phone plans go up and down with the seasons, so a budget that uses last month's number is often wrong. This guide shows how to find a steady monthly amount for a bill that changes, how big a buffer you need for the high months, and what to do when a bill comes in higher than planned.
Every dollar figure here is a made-up example to show the math, not a typical bill or a recommendation. This is general information, not financial advice.
Quick checklist
- ☐ Find the last 12 months of the bill
- ☐ Add them up and divide by 12
- ☐ Round up to a steady monthly amount
- ☐ Set aside that amount every month, even in cheap months
- ☐ Start with a small buffer for the expensive stretch
- ☐ Check once a year and adjust
Step 1: Find the last 12 months
Most utility companies show past bills in your online account or on the bill itself. If you just moved, ask the company if it can share the average for the address, or use a high guess for the first year.
Here's a made-up year of electric bills:
| Month | Bill |
|---|---|
| January | $128.00 |
| February | $115.00 |
| March | $92.00 |
| April | $78.00 |
| May | $96.00 |
| June | $142.00 |
| July | $188.00 |
| August | $195.00 |
| September | $150.00 |
| October | $88.00 |
| November | $97.00 |
| December | $121.00 |
| Total | $1,490.00 |
Step 2: Work out a steady monthly amount
Divide the year by 12: $1,490.00 ÷ 12 is about $124.17. Round up to $125.00 a month and put that in your budget every month.
The bill will still be $78.00 in April and $195.00 in August. The idea is that cheap months pay into a buffer and expensive months draw from it.
Step 3: Start with a small buffer
If you start in January with nothing set aside, the expensive summer can drain the buffer before the cheap fall months refill it. In this example, starting at $0 would leave you $59.00 short by September.
Starting with a $75.00 buffer covers it:
| Month | Bill | Saved ($125.00 minus bill) | Buffer after |
|---|---|---|---|
| January | $128.00 | −$3.00 | $72.00 |
| February | $115.00 | +$10.00 | $82.00 |
| March | $92.00 | +$33.00 | $115.00 |
| April | $78.00 | +$47.00 | $162.00 |
| May | $96.00 | +$29.00 | $191.00 |
| June | $142.00 | −$17.00 | $174.00 |
| July | $188.00 | −$63.00 | $111.00 |
| August | $195.00 | −$70.00 | $41.00 |
| September | $150.00 | −$25.00 | $16.00 |
| October | $88.00 | +$37.00 | $53.00 |
| November | $97.00 | +$28.00 | $81.00 |
| December | $121.00 | +$4.00 | $85.00 |
The lowest point is $16.00 in September. You can keep the buffer as a line in your savings or just leave it in checking and track it on paper. If you're starting in a cheap month, like April, you may not need a starting buffer at all, since the spring months build it up first.
Step 4: When a bill comes in higher than planned
- Pay it from the buffer if there's enough.
- If the buffer runs out, cover the gap from your everyday spending that month, not a credit card if you can avoid it.
- If it keeps happening, your monthly amount is too low. Raise it for next year.
A rate increase, a new appliance or a hotter summer can all push the yearly total up. Recheck the 12-month total once a year.
Another option: ask about budget billing
Many utility companies offer budget billing (also called level or average billing), where they charge about the same amount every month based on your past use and adjust it later. Ask yours how it works, how often it changes the amount and whether there's a catch-up bill at the end of the year. It can make the bill steady, but you still pay for what you use. How to Lower Your Monthly Bills (Call Script + Checklist) has tips for calling.
Common mistakes
- Budgeting last month's bill. An April number won't cover August.
- Spending the "extra" in cheap months. That money is next summer's electric bill.
- Setting autopay without a cushion. A high bill can pull more than you planned; How to Set Up Autopay Without Overdrafting shows how to plan for it.
- Forgetting other bills that change. Gas, water and phone overages work the same way. Give each one its own monthly amount.
If you share a home and split these bills, How to Split Bills With a Roommate or Partner covers settling up.
A spreadsheet to track it
Paper works fine. If you'd like a spreadsheet, the Monthly Bill Tracker ($5, Excel and Google Sheets) lists up to 40 bills with amount, due day, category, autopay and account notes, has a due-date calendar and a 12-month paid checklist where you type x or the actual amount if it was different (so you can enter $125.00 as the planned amount and the real bill each month) and unpaid bills past their due day turn red, plus a summary by category and month (paid vs. planned) with a chart (details). It doesn't work out an average or track a buffer for you, and it doesn't connect to your bank or send reminders.
Honest note: I make this template and sell it under Cedar & Ledger, so I'd earn from a purchase. General information only, not financial advice.
Try the free electricity cost calculator →
Related template: read about the bill tracker template
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Frequently asked questions
What does this guide cover?
Electric, gas and water bills go up and down. Average the last 12 months, set aside a steady amount and keep a small buffer. Made-up example.
What are the steps?
1) Find the last 12 months; 2) Work out a steady monthly amount; 3) Start with a small buffer; 4) When a bill comes in higher than planned.
Do I need a template to do this?
No. A notebook or a sheet you build yourself works fine. Cedar & Ledger also sells spreadsheet templates (I'd earn from a purchase); see the template box at the top of this page.
Is this financial advice?
No. It's general information with example numbers only, not financial, tax, legal or medical advice. Use your own numbers and check anything important with a qualified professional or the official source.