How To Plan The Unexpected

I recently received an email from a reader with the following comment:

Everyone knows that writing a budget is the best thing to do. But in all my efforts it is hard to make a monthly budget when you are unable to foresee emergencies and so bills are not fixed -- like this winter with my gas bill!

This is a common problem, people don't plan for the unexpected. When writing our monthly budget, we should be expecting the unexpected. A savings account should be set up for such "emergencies," this savings should not be touched at all. It is only for such emergencies as the car breaking down, the water heater needs replaced, etc etc.
Start with building this savings to $1000. Then Dave Ramsey advises saving enough in this fund equal to 3-6 months of your salary.

As for utilities, what I called both the gas and electric companies and asked to be set up on level payments. This means that in the summer when gas bills are almost Nil, I am paying more, but in the winter time when gas prices are high, I am paying less.
There is still some fluctuation, but not nearly as much. For example, my last gas bill, which I received last week, was $70. If I was not on level payments, it would have been $150 considering the mild December. When I get my next bill, it will probably be $5 more, but that is better then the $200 bill I would have received with the harsh January winter we have been having.
Breaking it down

OK so how do they figure leveled payments?

They take your 12 most recent bills and add them together. Then from that they determine the average billing. Each month the oldest bill drops off and the newest bill is added on. For example, when I got my "January 2007" bill last week, the period they were figuring ran from February 2006-January 2007. Next month, February 2006 will fall off and be replaced by February 2007.
I am behind right now though
If you are behind in your utility payments, the best thing to do is call the utility companies that you are in arrears to and ask for payment arrangements. They will take the past due amount and divide it by 12. You will then be required to make full payment (or more) of each months bill plus the 1/12Th payment until your account is brought back current.

I hope this explanation helps. However the key to all of this is to write a monthly budget and the beginning of every single month. We don't write one budget and think that covers every month. The best place I know for free monthly budget forms is here.