Money

4 steps to get on top of your household bills permanently

Bills, bills, bills - they can seem never ending, but with these practical steps you can gain control of your finances to become a budget wrangler extraordinaire.

By Carolyn Tate

Managing household bills can sometimes feel like a never-ending juggling act, especially as our work and family circumstances change, or we face changing financial circumstances such as part-time work or retirement. But achieving financial organisation doesn’t have to be hard, it just takes a little bit of planning (and a dash of frugality).

These 4 simple steps will help you get on top of your household bills permanently, ensuring you're always organised, budgeting effectively, and that you never miss a due date again.

Step 1: create a detailed budget planner

The first step to mastering your household bills is creating a detailed budget planner. Include all your regular bills, such as mortgage or rent, utilities, insurance premiums and subscriptions.

Start by noting down the due dates of each bill, the amount owed, and whether it's a fixed or variable expense.

A budget planner can help you to work out where you money is going, and project whether you have enough to pay for it. You can then make tweaks until everything fits together and you’re confident with your financial situation. Download the Citro expense tracker, or use the online moneysmart budget planner.

Step 2: set up automatic payments

Once you’ve got your budget in place, the next step is to simplify your bill payments as much as possible by setting up automatic transfers or direct debits.

Most banks and financial institutions offer this service, and it allows you to schedule payments for bills like utilities, insurance, and loans to come out of your account automatically on the date you choose, and at the frequency you choose.

Setting up your bill payments as direct debits means you don’t have to remember to pay your bills on time, and you won’t risk being pinged with any late fees.

It’s important to note, however, that if you don’t have enough money in your account to pay a bill, it may not go through and you could have to pay a late fee; or if it does go through, your bank may charge you for being overdrawn.

Most banks will now automatically categorise your spending to make it easier for you to track and monitor what’s going in and what’s going out.

Step 3: establish an emergency fund

While it’s important to focus on your regular bills, that’s not your whole financial picture. It's also important to be prepared for the unexpected.

Having an emergency fund means you’re prepared for an emergency, and you don’t have to live in fear of an expense popping up out of the blue. Things like unexpected medical bills, a broken down car, a gutter that needs fixing, or anything else that could come your way.

Experts advise ideally having at least three to six months' worth of living expenses in this fund. If you don’t have an emergency fund in place now, you can set a savings goal to contribute a set amount each week or fortnight until you have enough to feel comfortable.

Step 4: monitor and adjust your budget

It’s a rare person that creates a budget and then never has to touch it again! To maintain control over your household bills now and into the future, make sure you regularly monitor your budget and make adjustments as needed.

Keep a close eye on your expenses and income, and just make changes along the way to adapt your financial plan to your current financial situation. Budgeting is an ongoing process; by continually monitoring your finances, you can avoid nasty surprises and identify areas where you can cut costs or allocate more resources. This flexibility ensures your budget remains effective over time.

5 bonus tips

To supercharge your budgeting skills try these bonus tips:

  • Track your daily spending with Citro’s expenses template (make a copy of your own) for at least a month to identify areas where you can save money. You’ll be surprised at the things you might miss, and making small changes can add up to significant savings.
  • Negotiate with service providers, such as insurance companies or utility providers, on your bills and/or agreements. They will often work hard to keep you as a customer, and you may be able to get a better deal or discount.
  • Talk to a financial adviser if you feel like you could do with some help managing your finances, or with investments and retirement planning.
  • If debt is getting on top of you, speak to the National Debt Hotline to get advice on what to do next. You can also read Citro’s story on 7 ways to make debt disappear.
  • Review your insurance policies annually to check that you have the right cover for your life as it is right now, and that you aren't paying for unnecessary extras. Using a comparison website like iSelect or Compare the Market makes this a simple process.
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