Bill smoothing could be the key to all your financial woes

It’s tough when all your bills seem to come at once. When this situation happened far too often, it prompted me to even out those bumps and better manage my household budget, with a little planning.

Officially called ‘bill smoothing’, many utility providers offer an instalment payment plan, where you can arrange to make payments fortnightly or monthly, instead of all in one go. To ease the budgeting burden, I chose monthly, but fortnightly is just as good.

Some of the companies offering this are:

• Origin Energy
• AGL
• Click Energy
• Red Energy
• Power Direct
• Dodo
• Unitywater — Smoothpay

These smoothing plans are interest free and only take a few minutes to set up over the phone. (Get your bill out first).

UnityWater don’t charge interest if using Smoothpay, even for debts on bills you haven’t paid. The amount is automatically worked out based on your past six months of bills.

Some places have different options for smoothing bills:

• Telstra offer automatic monthly payments (on due date) or fixed fortnightly payments (no sweep)
• In Queensland, you can pay vehicle registration 3-monthly or 6-monthly by direct debit (small surcharge on rate).

What if I haven’t paid enough?

Don’t worry, some providers do a 6-month review to ensure the estimates are correct. At any time, you can opt to log in or phone up to check your bills are being covered. It’s important to get a plan that has a final balance owing sweep, so you don’t have to worry about remembering to pay the final amount.

And if you pay for more than is used, most suppliers will credit your account and have a refund available on application. Always check in advance though.

Are there any downsides to bill smoothing?

Some utility providers offer monthly billing based on estimated usage but each month may actually be a different bill amount, due to seasonal variations. So, this is a bit harder for budgeting purposes. True bill smoothing will take an annual amount based on your usual usage and break it down into 12 equal payments.

Another downside is, not all energy, gas, and phone suppliers offer bill smoothing or automatic payments.

Also, to avoid over-paying, you will want to make sure you get an actual meter read that matches your payments, if paying in advance for electricity.

Bill reductions are a nice bonus

If you’re having trouble paying your utility bills and are not aware of the rebates or help available, check out MoneySmart’s utility bill rebate list. If you’re a Telstra home phone customer and have a pension card, ensure you ask them for their pensioner discount to get fee-free payment options, a waiver on late payments, and a small discount on calls. To register, call 13 22 00.

In NSW, if you’re a driver who holds a pension concession card, you can get a free car registration fee and then automatic renewals. You still must pay CTP insurance, have no restrictions on vehicle or licence, and get a ‘pink slip’ safety inspection if your rego papers say you need to. Just notify Roads and Maritime that you hold the card and comply.

On the rego matter, forgetting to pay your vehicle rego is heavily penalised, through a much higher fee and the prospect of an out-of-registration fine. So, it’s well worth having the email reminder service and direct debit.

Centrelink’s Centrepay service can also help smooth out expenses and is voluntary. They can arrange for deductions of all ongoing expenses, including rent, childcare costs, electricity and water from any Centrelink pension.

Can I smooth council rates?

For council rates, it’s better to use their direct debit method rather than pay by credit card or BPay your own amounts. Why? This is because there is often a credit card surcharge and both these ways to pay do not automatically sweep over the final amount owing. Bills can cross paths with your regular payments, to add more confusion about what to pay at the end of their usual period.

On direct debit, you can nominate monthly or fortnightly payments of your choice and ask if your Council offers an automatic final amount sweep.  On Brisbane City Council’s website, it is a matter of filling out a direct debit request form and selecting ‘periodic payments, with any excess automatically paid.’

Planning Ahead

Planning your month’s outgoings is easy. You simply note down all the amounts and dates they’re deducted in a spreadsheet (or notebook) and check your savings account has the amounts needed every week. Once you’ve done the work to get all your ongoing bills smoothed, you too will think bill smoothing is better than French bread.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.