Canadian Personal Finance Blog

Hang ten moon doggies! I have seen a whole bunch of surfing movies in my life and I still am not too sure what that means, but it sounds really surfer-like, so it fits with my thematic premise this week.

Yesterday we introduced the concept of Bill Surfing , ok, we talked about it, but we never really explained what it really meant, but today, we really will define what that means (I hope).

We now have our list of expenses that we usually pay on a monthly basis, but we still have this quandary of only getting paid every two weeks, and what to do about it.

Solution 1 All At Once

Simply pay all of the bills from one of my pay cheques. While that does solve the problem it does mean that I have to do some judicious grocery shopping and a very tight final few days ’til I have a pay cheque that I can buy things with (assuming that one pay cheque can actually cover this entire group of bills, which in my case is not true).

Solution 2 Piece Meal

As each bill arrives pay it the moment it arrives and be done with the darn thing. This was kind of the methodology that I started working with before I came upon bill surfing. This method has the advantage of having some disposable income all the time, but not a very predictable out flow of money, especially if bills are being paid as direct withdrawals from your bank accounts.

Solution 3 Bill Surfing

What would happen if I could make my “BILLS” payment on each pay cheque equal (or as close to equal as I can make it)? This would mean that each pay cheque I would have a predictable amount of money going out, and I would know exactly what my disposable income actually is (and then plan any extra saving I wanted to do). How can I do this?

Read tomorrow and we’ll spill the beans on this highly effective and exciting new way of paying bills (this writing like I am publishing an info-mercial is a lot of fun, but must be really annoying to read).

This is an interesting concept that we who get paid every two weeks can use, and most certainly must plan around.

So what do I mean by bill surfing?

Here is a list of typical bills for a household:

• Hydro
• Mortgage Payment
• Car Payment
• Property Taxes
• Natural Gas or Heating
• Cable TV
• Home Phone
• Cell Phone
• High Speed DSL Access
• Water
• Charitable Donations
• Life Insurance
• House Insurance
• Car Insurance
• Bank Service Charges
• Xmas Savings
• RRSP and/or RESP Savings

I trust this list, because I took it from my Monetary Statement (we can talk about that later) that I gave my wife to show her where all the money went (and other parts of our financial story). There may be things you can add (like a monthly loan payment) or remove (maybe you only have a cell phone and no home phone bill), but this is a good model to start with.

So what is Bill Surfing? Well you have monthly bills and 2 or three payment periods to pay them out, what do you think it might be?

Tomorrow: Surfing or balancing? Tomatoe or Tomato?