Bill Overpayment

I mentioned a few months ago that I overpay on both my electricity and water bills every month.

I’ve been paying $73/month towards my electricity and $40/month towards my water bill.

Originally my budget billing for electricity was $73/month – so I wasn’t paying any bit over or under. Then after 6 months the electric company recalculated that to break even I would only need to pay $53/month. Well, I still continued to pay $73/month anyway. Fast forward to my most recent bill, I now have a credit on my electricity bill of $122.50.

As for my water bill, I don’t have the option of signing up for budget billing, so I just made my own. I picked an amount that was higher than the highest monthly bill I had the previous year. For instance, my highest water bill in 2008 was $35, so now I pay $40/month to be sure I always pay over this amount. Typically, my bill is for only around $25/month. Well, I now have a credit on my water bill for $86.64.

That’s right, between my two bills I have a credit balance of around $200.

So what is the point of overpaying my bill?

There are five for me:

1) If I ever forget to pay my bill one month for whatever reason, I don’t have to worry about it because the credit on the account should cover the bill. This includes my family not having to worry about paying for this bill if some freak accident were to happen to me. Also, I don’t have to worry about CHECKING the bill each month for exactly how much I owe. I can just use my automatic bill pay and be done with it.

2) If I loose my job, I can breathe a little easy for a month or two knowing there is a credit on my account to pay my bill. It is a little bit like a utility “emergency fund”.

3) When I move, I’ll get checks from each of these companies. Since this money will have already been “spent” – it will be like free money.

4) It keeps me in good graces with these companies. I feel like the electric company and the water company are not people you want to piss off. =)

5) I get a psychological benefit from knowing I don’t HAVE to pay my current bill if I don’t want to.

Now, I know that it is silly to have A LOT of money siting in credit in a utility bill. So I’m cutting back on how much I pay to the water company each month to $30/month until I start to get back to where I have just a credit of $40. As for electricity, I’m not going to decrease my payment until we get through winter – having only been through one in the Midwest I’m still not comfortable with exactly how much it will cost each month.

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3 Responses to Bill Overpayment

  1. mo says:

    I ‘over pay’ a monthly amount into a savings account (at the same bank I use to pay my bills by direct debit – I will transfer the right amount over before the quarterly) so that I know I am covered but should also be building up some emergency cover there too.

  2. Jessie says:

    When Jordan and I set up our joint account (just recently) we picked the highest utility amount, and budget for that. So our joint accoutn will develop a ‘buff’er’ or household emergency fund as time goes on.

    It’s a great idea, I’m glad you wrote about it.

  3. eemusings says:

    BF’s sister and her partner do that. I think they have something like $200 credit to their Sky TV account :0.

    I have a “bills” account that i put money into every week – but need to adjust how much I put in because I’m often coming up short each month!

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