Ah, winter. It’s right around the corner, and you know what that means: an occasional frost, an occasional snow, and a consistently high heating bill. And it doesn’t matter what you heat your house with, either – wood, propane, or nuclear fission, it all costs a lot more in the winter than it does in the summer.
What if there was a way to even out that expense and spread it over a whole year? What if you could pay for your heat a small amount at a time, say $75 a month, all year long? In exchange for paying even in the summer months, you would never see the monstrous winter bills. Plus, you could add this expense into your normal monthly budget, and never have to wonder how high the bill is going to be.
As you may have guessed, I’m a big fan of such a system, and I’m going to suggest two alternatives for reaping these benefits in your own home.
Energy company alternative
Your energy company probably offers a plan very similar to this. They’ll start with the entire amount you paid them in the last twelve months, add a small percentage for inflation, then divide that amount by twelve, and there’s your monthly payment. At the end of the year they’ll settle up with you – you may get a small amount back, or you may owe a small amount more.
In this alternative, all the work is done for you. The energy company does all the math and sends you the appropriate bills. You don’t have to think about anything, and more often than not, you get a refund after a year.
Roll your own alternative
If you can handle this kind of higher math, you can achieve this same effect all by yourself. Just pay a steady amount into a “home heating” bucket, and when the bills start rolling in, just pay them out of that bucket.
The nice thing about doing it yourself is you get to collect interest on whatever amount is in that bucket. This has the effect of slightly lowering your heating bill. On the other hand, if you slip up and spend your heating budget on shoes one month, or if you did the math wrong and didn’t pay yourself enough each month, you could end up owing more than you planned for. So be careful.
Level billing can be a load off your mind, and you might even save a bit by doing it. Take a look at your situation and decide if one of these options is right for you.
This article originally appeared in the July 23, 2008, edition of the Greenhorn Valley View.