Another Bill - Don't panic !

I used to panic when a bill arrived because we usually didn't have the money in the bank and had to pay by credit card. By the time we paid that bill off the next wave of bills arrived. No more thanks ! We sat down and tried to work out the best way to put aside money for our expenses without spending it before the next expense needed clearing.

Firstly, we pulled out the previous bills for the last 12 months and calculated the totals and divided by 52 weeks to give us our base weekly expense figure. Mainly the big ticket items such as:

• Water
• Electricity
• Gas
• House Insurance
• Car Insurance
• Medical Insurance
• School Fees
• Land Rates/Tax
• Telephone

Once we had this figure $X we added an extra $20 for variation and increases. We then opened up one of those online only, high interest savings accounts and linked it to our transaction account where our wages are deposited. Each week after our wages were deposited an automatic transaction transferred a set amount into the high interest account.

The money was moved straight away so we didn't miss it as such. Now bills usually come every quarter so this savings account has the chance to build up enough money to cater for the expenses and also earn a nice rate of interest before the next bill arrives. When it does arrive now I don't panic. I simply transfer the precise amount into our transaction account the day before payment and clear the expense online.

This savings account also provides us with a buffer in case of unforseen or additional expenses. We don't withdraw anymore than what is required and if we have enough in our transaction account to clear a bill I won't touch the money at all. The automatic transfer of the money straight after we're paid is what really helps us save. Scared of bills no more !