What bills are better paid annually?

louby40

I have lots of direct debits paid monthly. I'd love to pay them in total each year but really struggle to think how I can do this because it would mean I'd be saving each month (for the following year) and paying the current direct debit.

The only bill I pay in full is my buildings and contents insurance, which was about £80 this year.

I pay monthly:
DVLA £11.37
Tv Li. £12.12
Water £29.76
Green flag £7.06
Car ins £22.26

How can I tackle this?

Whoknowskt89

I don't know what your SoA is like but personally, I put aside £250 per month for yearly bills (extortionate service charges on a flat and also means a buffer for odd repair bill)

You could start by putting aside as much as you can per month on top of your direct debit. It may mean next year some bills are paid in full and others still monthly, but eventually you should be able to get to a point of having them all yearly.

I'd check the documents - see what is the most costly to pay per month and try to aim for covering that in year one. Then once you've renewed that, what you'd usually have for direct debit, save for the next year.

I keep a separate account to cover all this (easy access savings account or another current account)

Whoknowskt89

By the way...

Car tax - more expensive monthly
TV licence - no increase for monthly I believe
Water - no increase for monthly I believe
Green flag - sorry don't know about this (my cover is very basic and £30 a year never had to do monthly!)
Car insurance - more expensive monthly

PasturesNew

I've always tried to pay all bills, in full, the very first day - my thinking has always been that if I lose my job tomorrow those are monthly payments I don't have to worry about!

louby40

Thanks everyone for your suggestions. I'm going to look into what I can pay.

Ilona

I keep my direct debits to a minimum, don't like people taking money out of my account. I know when my bills have to be paid so I save up for them.
Breakdown.
Car tax annually.
Car insurance annually.
Car servicing and MOT when it happens.
RAC annually.
YHA membership annually.
Water gas electric quarterly/half yearly cheque in the bank
House insurance monthly DD
Broadband/house phone monthly DD
Council Tax cash in the Post Office. 10 months.
Don't have a TV.
Food shopping and petrol with a card, cleared monthly with a cheque.

To change from monthly to annually you might have to do it one bill at a time, depending on how much spare cash you have at the end of each week/month. Do you have an emergency fund, can you use some of that to pay the next car insurance or tax in full? Whittle them down one at a time. Also check if you have any DD's that are not important, are they a NEED or are they a WANT.

Ilona

Chandelier.

Louby..

I currently pay car tax, car insurance and servicing costs annually. I save about £100pm into a separate account to cover these costs.

My only other direct debits are phone bill, denplan, gym, union fees and phone insurance. I'll be cancelling the phone insurance soon though. Most of these bar two come out on first of the month.

I have two standing orders- one to pay board and another to save into a HTB Isa. These come out on the 1st.

I then transfer what I can into savings and use cash for other expenses like petrol.

I manually pay down my debts each month and make over payments where possible. I have discipline when it comes to this and always pay above minimum.

I much prefer to have minimal direct debits especially ones that come out all over the month. That's why I manually pay down my debts because I know on the first of the month everything comes out.

louby40

At the moment I have no emergency fund as I've ploughed everything I have into paying for my kitchen with cash rather than borrowing. What I have borrowed is on 0%.

From August I shall start adding to an emergency fund again. I shall have to see how much spare money I have to start saving for annual payments.

takman

Chandelier. wrote: »

Louby..

I currently pay car tax, car insurance and servicing costs annually. I save about £100pm into a separate account to cover these costs.

My only other direct debits are phone bill, denplan, gym, union fees and phone insurance. I'll be cancelling the phone insurance soon though. Most of these bar two come out on first of the month.

I have two standing orders- one to pay board and another to save into a HTB Isa. These come out on the 1st.

I then transfer what I can into savings and use cash for other expenses like petrol.

I manually pay down my debts each month and make over payments where possible. I have discipline when it comes to this and always pay above minimum.

I much prefer to have minimal direct debits especially ones that come out all over the month. That's why I manually pay down my debts because I know on the first of the month everything comes out.

You should open another current account (preferably one that pays high interest) and setup all your direct debits to come out from there. You can then setup a standing order once a month which transfers an amount to cover all of these and also use this as your savings account.

For general expenses i would recommend the Monzo card instead of using cash. You can top it up with your budget each month/week and use the card to pay for petrol etc. When you use the card it instantly comes up on your phone and updates the balance. It also allows you to see where your money is being spent to further fine tune your budget, which is important if your looking to reduce debt.

EssexHebridean

louby40 wrote: »

I have lots of direct debits paid monthly. I'd love to pay them in total each year but really struggle to think how I can do this because it would mean I'd be saving each month (for the following year) and paying the current direct debit.

The only bill I pay in full is my buildings and contents insurance, which was about £80 this year.

I pay monthly:
DVLA £11.37 DVLA charge a premium for monthly - switch to paying either six monthly or annually and in the interim stash that monthly amount into a specific savings account ready to pay it when due
Tv Li. £12.12 Right thing to do - this doesn't cost any extra and you may as well have the money for longer. (Beware to anyone still paying quarterly though - this costs!)
Water £29.76 Yep - no issue with that either - it's the standard way of paying and there is no loading for doing so.
Green flag £7.06 Check whether you get charged extra for this. Also check whether you can get a better deal when renewal comes along - we pay a touch under £60 (annually - and yes we pay it annually!) for each car with AXA currently, previously similar amount with Kwikfit - have found both excellent
Car ins £22.26 Insurers charge a premium for monthly - start setting money aside monthly so you have it in place ready for the renewal, and from then on set aside 1/12th of the annual premium plus 10%

How can I tackle this?

PasturesNew wrote: »

I've always tried to pay all bills, in full, the very first day - my thinking has always been that if I lose my job tomorrow those are monthly payments I don't have to worry about!

Flawed logic really though - in the event of you losing your job sure you're not having to pay out monthly, but you should still be putting money aside to cover the monthly cost of the items concerned so that it's there when needed...Your paying things up front is the right thing, but your reasons are a wee bit skewed for the purpose of this thread/forum!


Something to think about - we have assorted "offshoot" savings accounts from our current account one of which is for "car expenses" - we put £160 in there per month (2 x cars, neither that new) and that covers tax (£30 for mine, £20 for MrEH's) Insurance, MoT, servicing, breakdown and things like tyres etc - I work on both cars needing a full set annually as we're both reasonably high mileage. It means that when something comes along generally speaking it's covered - if something unexpected occurs (MrEH's needed a clutch a few years ago, mine recently had to have a belt change - then the emergency fund pays for it and is then replenished. We work the same way for random household stuff (annual contents insurance, kettle or iron needing replacement, tub of paint for the fence, that sort of thing), for holiday, for presents and even for fun stuff - a set amount per month goes into it's own little "pot" and then it's ready when needed.

iolanthe07

You used to be able to get 5% off your Council Tax if you paid it lump sum in advance, but I don't know whether any councils still allow this. Mine (Sedgemoor in Somerset) doesn't, but it might be worth asking.