Whether you’re budgeting for your home or your business, one of the largest, trickiest budgeting items is your energy bill. With energy prices being subject to change, how do you know what to set aside? You don’t want to under-budget and come up short for the month; if you over-budget, and you can miss out on some crucial expenses. Here are some helpful tips and tricks to accurately budget for your energy bill every month.
Do: Forecast your usage based on common variables
Weather is a crucial variable when it comes to predicting your energy bill. If the weather forecast is calling for a heat wave, you can safely assume that you’ll be running the air conditioning daily. If you can predict the energy costs that you’ll be using most frequently, you should be able to come up with an accurate budget to incorporate all of those weather-related expenses.
While some expenses stay constant, they are few and far between. The economy is constantly ebbing and flowing, and so are energy prices. Just because last July’s energy bill was higher than August’s doesn’t mean the pattern will carry into the following year. A dangerous tool for budgeting is last year’s report analysis. Every year is a different economical structure, so every part of your budget is subject to change.
Do: Adjust for changes in occupancy, energy-conserving appliances, or hours of operation
Have you brought in new employees? Had a new baby? Bought new EnergyStar appliances? Any changes you make, no matter how insignificant they seem, should be accounted for when creating an energy budget. More employees mean more energy used; they could require more equipment, spend longer hours in the office, or even just open and close the fridge more than in the past, resulting in a higher electric bill. EnergyStar appliances could lower your bill depending on how often they’re used versus your old appliances. Take every aspect of your home or business into account; any small change could greatly impact your energy bill.
Don’t: Use last year’s numbers with a general percent increase
Many companies and homeowners commit this energy budget faux paus: applying a general percent increase to last year’s budget. The market is unpredictable; one month could be sky-high, and the next could plummet. There are many factors that sway the market one way or another, and some of those factors are based on international relations. Gas prices often fluctuate with international turmoil, and the same principle can be applied to energy prices. Using last year’s budget is risky and will often end with you either over or underbudgeting your energy bill. For complete peace of mind, monitor the market closely on a month-by-month basis.
The energy market is a fluctuating, ever-changing entity. For the most accurate budget, closely monitor any economic changes, a general knowledge of your location’s weather patterns, and even personal preferences. Not sure where to start? Contact a professional energy consultant at Unified Energy Alliance to get started building your best energy budget today.