Budgeting Basics - Step 3 - Bills

Find every recurring bill you have. 

* If the amount is the same each time you pay, then one copy of that bill will do.  Car payments, mortgage payments, and phone bills often are the same each month.

* If the amount varies, gather several copies, ideally a year's worth.  Utility bills, especially electricity or gas, often vary from month to month.

Take that stack of bills and sort it. Bills that are the same every month go in one stack. Bills that change each month go in another.

We're going to list these bills on our budget. If the bill is the same every month, list that item and put the amount in the column for monthly expenses.

If the bill changes, take all of the examples you've collected, add up the amounts, and divide by the number you have. That will give you an average amount. List the bill on your budget and put that average in the monthly expense spot.

If you have bills that are more frequent than monthly or less frequent than monthly, you can convert them to a monthly expense to list them in the Monthly column or you can convert them to an annual expense and list them in the Annually column.

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