Tips to learn how much to budget for utilities.
It’s not easy to know how much to budget for utilities because costs can change monthly. If you want to create a successful utilities budget, here are a few tips to follow.
Wondering how much you should budget for utilities? Creating a utilities budget can be challenging due to fluctuating monthly costs. To help you establish an effective utilities budget, here are some valuable tips to consider.
When it comes to budgeting for utilities, finding the right balance can seem like a daunting task. However, with a few simple steps, you can gain a clearer understanding of how much to allocate for these essential expenses.
1. Use past payments to determine your budget for utilities.
Just because costs vary doesn’t mean it’s impossible to know how much you should budget for utilities. The best way to build an accurate one is to see how much your utilities cost in the past.
Do some research and see how much you paid for utilities in a certain month the previous year. As long as your utility needs haven’t changed much (in other words, another person hasn’t moved in or you moved into a larger house), your utility bill this year should be relatively similar. Use this data to help you build an accurate budget for the upcoming year. Learn how to make a monthly budget by utilizing past payments to determine the ideal allocation for utilities.
2. Include a contingency in your utilities budget.
Even with the best research data, there’s still a good chance your utility bills won’t be identical to what they were last year. Be sure to include a small contingency in your utilities budget to cover any variability in costs. You never know when you might get hit with a higher bill, and having that extra money will ensure you don’t break your budget.
3. Organize and update your budget for utilities.
Things don’t stay the same forever. When something changes — like installing new energy-efficient windows, for example — your utility bills will change, too. Update your budget regularly so it’ll be as accurate as possible for the future.
The best way to stay organized and make updates easy is to keep your utility budget information in an Excel spreadsheet. You probably drafted your budget on a spreadsheet, but it’s a good idea to convert spreadsheets to PDFs to make it easy to share and collaborate with family members or if it’s for a business, other team members.
Rules of thumb for a utilities budget.
Here are some basic guidelines to keep in mind as you’re planning your utilities budget:
- Set aside a percentage of your income. Allocate a reasonable percentage, such as 5–10%, of your monthly income toward utilities.
- Consider the size of your home. Larger homes typically require higher utility budgets due to increased heating, cooling, and energy needs.
- Review past bills. Analyze your previous utility bills to identify patterns and trends, helping you estimate future expenses more accurately.
- Account for seasonal fluctuations. Factor in seasonal changes in heating, cooling, and water usage when setting your budget, allocating more funds for extreme weather months.
- Include a contingency buffer. Plan for unexpected costs by setting aside a small contingency fund to handle unforeseen utility expenses.
Create a utilities budget PDF to streamline tracking.
Want to learn more about how to work with PDFs online? Discover how Adobe Acrobat can make it easy to share, edit, and manage your financial documents.
