28 Jul Managing Bill Shock
In early March, I posted a Moowsletter titled, ‘What About Our Parents’. The cut and thrust of which, ‘bill shock’ (power and gas) is going to hit retiree’s harder than most beginning July 1 this year. Put simply, they have to manage a fixed income against rising cost pressures.
On cue, I got a flurry of emails from non-retirees screaming, “what about me”. The poor petals thought I wasn’t thinking of them, but I was. Here’s proof, four months later I’m still thinking about you, and everyone else.
Bill shock is now being felt by everyone from Bondi to Broome and it’s beginning to bite hard.
Incredibly, since the March Moowsletter, it has emerged that an increasing number of power users are now turning their power off because they simply can’t afford it. They now rely on gas to cook and shower with.
Sadly, most of these are elderly folk and the only way they can keep warm at night is to retire to bed early. No power also means no TV which doesn’t leave them many options than to read a book by candle light. Admittedly, they probably grew up this way but they shouldn’t be confined to it either. But bill shock has changed all this, and now it’s being shoved in their faces, literally.
In the meantime, those who can afford to keep the power on need to manage what’s in front of them…
Managing Bill Shock
The following strategy won’t get rid of your power bills but it will help make them more manageable. It’s nothing new, it’s just a reminder of a simple little budgeting technique available to all of us.
Suppose your power bill is $300 per quarter (on average). Instead of paying it in one lump sum, just pay $100 per month in advance. You could even set-up an automatic payment just to soften the blow. It is especially useful for retirees.
As I said, it’s nothing new but sometimes we forget these things when we are more focused on the problem than the solution.
There is also the other option of shopping your account around, but to be honest, I’m not sure there is much difference between the suppliers now. Most of its smoke and mirrors with some clever accounting to make it look attractive. But in the end, the effect is still the same.
The Tipping Point
Everyone has a ‘Tipping Point’. Eventually people can only tolerate so much before they push back or just walk away. It can apply to anything – career, business, sport, relationships, whatever.
The electorate is approximating this point, if they haven’t already. Bill shock will become a major election issue because it’s hurting consumers on two fronts. The cost of power in homes but also via the goods and services we purchase.
Power costs are really beginning to hurt businesses, especially the small business sector which is the largest employer in our economy. The risk is rising power costs will eventually lead to unemployment. Businesses will either lay off workers or transfer jobs overseas to stay afloat.
Take for example the Campbelltown Catholic Club. For financial year 2015/16 their power bill was $1.1m, for FY 2016/17 it was $1.5m and this FY (2017/18) it is forecast to come in at $1.75. That’s a 60% increase in 2 years! If their revenue hasn’t increased, which it most likely hasn’t, they have to start cutting other costs such which may include laying off workers.
In the meantime, don’t expect the cardigans in Canberra to make some bipartisan agreement any time soon. The left will blame deregulation and privatisation while the right will blame the renewable energy subsidies we get slugged with via our power bills.
Worst of all, one party leader doesn’t have the ticker to pull the trigger (on just about everything), while the other one can’t be trusted. Sadly, it’s now got to the point where the punters aren’t sure which one is worse.
Leaving the lights on waiting for some sort or resolution will just lead to more pain and frustration.
In the meantime, just worry about the things you can control such as a monthly budget to pay your bills.
Have a great weekend!
Back paddock – have you ever wondered why the years appear to get faster? The reason is as we get older, each year becomes less relative to our age.
i.e when you’re ten years of age, one year is one tenth of your lifetime, but for a fifty-year-old, one year is one fiftieth of their age. Therefore, each year becomes less relative to our age giving it the feeling of moving faster.
Source: some mathematician on the radio. Not even sure what station it was. Sorry.