A lot of the gas and power companies offer their customers what's known as budget billing. The theory is that they will calculate what you spent in the course of the previous year, add 'X' amount to cover anticipated inflation, and then they divide that by 12 (months). The end result is that you pay - usually via your bank account - that sum every month so you're never presented with a big quarterly bill that requires paying all at once.

While it may be a good idea in principle, there are a number of things that can go wrong with budget billing. For example, if you use more than you did last year, then the following year, your payments may go up considerably. If on the other hand you don't use as much as you did last year, then your next year's monthly payments should go down. It's very rare to find a company who will refund you the money you under-spent in actual cash however.

Another thing to check carefully is what the company is going to charge you for administration fees. Some charge monthly but others just add a little more to your tariff or rate per unit. Whichever way they do it, the charge averages out around $2 - 3 per month. Now that may not sound a lot but if you were to keep the money you set aside for bills in your own account, you may earn interest on it. The money would still be there to pay the bills when they come in each quarter; you're just not actually paying someone else to earn interest you could be getting!

The next issue to think about is the contract or agreement that you'll most likely be asked to sign. It could lock you into the agreement for a full twelve months and if you find it's not working out for you, it may be difficult to get out of it. It can also get quite complicated if you move home.

It's ultimately a better idea to do your own 'budget billing'. As mentioned earlier, any money you put away into an account that's just for your bills will be earning you money rather than earning the power company money, and it won't cost you anything to do this. If however you do decide to go ahead, be sure you know exactly what the terms are of the agreement or contract. Be aware too that the company may well change your payment amount at any time and often without letting you know!