Back in November when I was taking a break from blogging, we were blindsided by a massive, completely unexpected bill. If you’ve been around here much, you know that Mike and I faithfully budget each month and are pretty on-top-of our finances. So how could we get surprised by a $1,500 bill?
I’m finally ready to talk about it.
If you look back at our September 2022 budget update, you’ll see that our water bill was surprisingly high. To make it easy, I’ll paste the excerpt from that budget update below.
Water – $260 We got a shocking water bill of $445. We had set aside $185 in August and had to budget the remainder in September (this bill comes every other month). Last weekend Mike discovered the reason. Most of our garden terraces are on timers, but the orchard terraces weren’t on timers yet. We water the fruit trees overnight, once a month. He had turned the water on the orchard and forgotten to turn it off the next morning, so the drip system on the trees was running for an entire month. Now looking up on the hill, standing out against the general landscape colored by drought, I see the vibrant green weeds growing through the woodchips around our young fruit trees. Sadly, our next bill that comes in November is also going to reflect part of this expensive oversight.
The thing about water bills, at least where we live, is they aren’t a direct reflection of water used during the dates of the bill because we don’t have smart meters. About half of the meters in our county use technology that allows meters to be read automatically. The other half of the meters, like ours, are not easily accessed and read by the water company on the exact day of your bill. The meters are actually read by a person– a meter reader. The meter reader cannot read everyone’s meters on the last day of the billing cycle, so even though your bill says it covers a certain time period, what your actually paying for is the water used between the last two times the meter was read.
So when we got the “shocking” $445 water bill in September and then found the orchard water running full tilt, we thought we had caught and solved the problem before it would have very much effect on our next bill. I didn’t think about it too much, but I did keep my eye out for the next bill.
Expecting a slightly elevated bill of maybe $200 (our November bill the previous year was $160) to a worst case scenario of $300, I nearly had a heart attack when I opened the email that showed November’s bill as $1,556!
Not thinking about the meter reader situation explained above, I was sure there was some other problem besides leaving the orchard water running for a month or so straight.
I thought back to the trenching we had done recently to bring water over to the garden. Instead of hoses going from the house up to the terraced hillside garden, we now have spigots with good pressure on every terrace. Did the workers somehow make a leak underground somewhere? This whole project already left a bad taste in my mouth because the cost came in much higher than expected! You can imagine my frustration now as I suspected that they also caused us to have a $1,500 water bill.
Mike was pretty sure that we had already discovered the sole culprit– the orchard water that was left running for a month. He explained that the meter must have been read just after the beginning of the watering oversight (September bill) and then the next meter reading included the majority of the expensive mistake (November bill)
I wasn’t convinced.
Mostly, I was afraid of waiting two months for our next bill and having another insane bill to face. I felt sick to my stomach whenever I thought about it. I hadn’t felt this make-you-ill financial stress in years.
For some perspective, In 2021, we paid $950 total for water, for the entire year. This one bill was more than 150% of what we spent for the entire previous year.
To test Mike’s hypothesis that there was no other leak (that the problem had been solved months ago by turning off the orchard water), Mike took a picture of the water meter and we didn’t use water for 12 hours. We were sleeping for the majority of the experiment, so it wasn’t very hard to go without water. I told all the kids what we were doing, then put a sock on every faucet, taped the handle on every toilet, tape on the washer knobs, and put bags over the shower heads. We were between renters in our Airbnb, so it was the perfect time to do a test like this.
The next morning Mike hiked up to the meter to find… it hadn’t changed! Hooray for no hidden underground leaks! I could now rest a little easier until the next bill.
I’m elated to report that when we got January’s bill, our bill was a mere $120. I’ve never been so happy about a bill in my life!
So what’s the takeaway?
For us, it’s definitely to get all of our water on timers and check them regularly to make sure nothing gets left on.
But there’s a big takeaway for you too. What would you do (or what have you done) if you suddenly had an unexpected expense of $1,500 that you didn’t budget for?
How we cover unexpected expenses
I didn’t talk about how we covered the bill. While we absolutely did not want to spend $1,500 on water, I’m grateful that we had money to move around to cover the bill.
It has not always been so easy.
We have a three-part plan for covering unexpected expenses. Even when we were on a very tight budget as we paid off six figures of student loan debt we followed this same plan for dealing with unexpected expenses. Here is our plan for handling unexpected expenses.
1- Change how our money is allocated
At any time in the month we can change how our money is assigned. We can take funds from one category and move it to another category. We do this every month in small ways. If we want to spend more on clothes, we might choose to move some funds from our food category to the clothing category. Moving money around is a normal part of having a flexible budget. It’s hard to break a flexible budget.
We always try to have a big financial goal that we’re working toward, like paying off debt or saving up for something. Normally we funnel all of our “extra” funds to our goal. When we set our budget at the beginning of the month, anything that is left after funding all of our normal budget categories will go toward our big goal. At the end of the month we zero out most budget categories and put all of that toward our goal (rather than rolling it over to the next month).
Covering our $1,500 unexpected bill was a matter of moving money around. Our current goal is paying for solar, so all of our extra money goes toward this goal each month. Instead of putting extra money toward solar that month, we paid the minimum so that we would have money for the water bill.
2- Split the cost with next month’s budget
Being able to split a cost with the next month’s budget is a benefit of being a month ahead. We budget using last month’s income, so the money that has come in this month is just sitting there waiting for next month to start. We have the ability to split the cost of a bill over two months because we have the cash for the second month available.
We used this strategy most recently with the garden trenching project I mentioned earlier. The bill was more than we could have handled by just changing how our money that month was allocated. We had to budget two months tightly and split the bill over those two months. Since the funds were actually in our bank account for the two months (because we are a month ahead), we had the cash to pay for the bill.
3- Hit up the emergency fund
Our last resort (besides debt) is using our emergency fund. There have been very few occasions where we needed to use our emergency fund and that’s the way we like to keep it. Having worked hard to build up an emergency fund, we want to do all that we can to avoid using it. It is comforting to have an emergency fund, but for us the best way to use our emergency fund is to not use our emergency fund.
On the few occasions that we have used or “borrowed from” our emergency fund, we have made paying it back quickly a priority.
We usually manage unexpected expenses in the first step of this three-part plan. When we need to move to step two, like we did last November, it’s a huge relief to have the additional flexibility. The handful of times we’ve need to resort to step 3 have been actual budget savers. Over the last ten years we’ve been fortunate to fit every unplanned expense, from small overspending to a few thousand in unplanned costs, into our three-part plan. It has helped us keep our budget flexible and robust and saved us a lot of stress and headache.
I hope it was helpful to see how our family handles unplanned expenses. If you don’t have a plan for dealing with those frustrating expenses that pop up, now is the time to make one so they don’t completely derail your finances.
You can do this!
How about you?
What unexpected expenses have you been hit with?
Do you have a general plan for handling unexpected expenses in your budget?
As a longtime landlord and property manager, high water bills can come from things as simple as a drippy faucet or a running toilet (the biggest culprit) so we are very upfront with tenants that they must report anything out of the ordinary water-wise (or they can be liable for any overages above x amount and put it in their leases)
We get quarterly water bills that come out a few weeks after quarters’ end then are due after that, and most meters are auto-read these days, so a running toilet over 3+ months can add up quite quickly to a surprisingly high amount for something that is typically an easy-ish fix.
The worst one we had was in a 3 unit with shared water metering and we simply could not find the leak after fixing all toilets, sub metering each units usage, and replacing all faucets the leak was still present but not visible except for the spinning dial on the meter. Well, we figured it out after one ceiling fell in in a lower unit because of a simple ongoing drip (happening for who knows how long)l!) in a supply line in the wall behind an upper unit toilet. Yikes! Luckily that lower unit was vacant at the time.
This was certainly an expensive process all told, but finally happy to be fixed and no more issues since.
Wow! That’s a crazy experience Christy! I’m glad no one was hurt when the ceiling fell in!! YIKES!
I’m so glad you’re back! I love hearing about your monthly financial goals and strategies. We had a money scare this month as well. We’ve been saving up to pay off our mortgage early for the last several years. We were just putting extra money in a savings account and decided to make a lump sum payment a couple weeks ago. Our mortgage is through our local bank so I walked in and gave them a check and then waited to see it pop up on our online account balance. Well, it didn’t show up after a few days so I started checking online every day. No big huge payment. I called the bank and they had no idea where the money was! I was so scared that I had done something wrong when I paid the bill–did I write the wrong account number on the check? Then my imagination went wild and imagined our hard-earned and saved money in someone else’s account getting spent in a few hours. After 2 nerve-wracking days the bank finally called me back with good news: they found the money! I was so relieved!! So it turned out good for us, but I about had a heart attack in the meantime. The even better news is we’re just a few months away from paying the mortgage off completely–so exciting for us!
Oh that would be so stressful, Katie! My imagination always goes wild in those situations too! I’m so glad that everything ended well. Congrats on being soooo close to mortgage-free!! That’s a huge accomplishment!
Add me to the relieved bunch. It had been so long that I was fearing the new post would be something life shattering. Next time, at least warn us or pop in and say we’ll be back in a few weeks/months.
When we moved to this house, the workmen somehow left the water on under the house and we got a bill of over $700. I called the water company and explained and they have a fund to offset what I’ll call stupidity, but that call oversights. It dropped our bill down to $250, $100 of which is the normal amount. We are living on disability and had burned through every bit of our savings when the COVID ravaged rental market forced to live 2 months in a hotel.
The water company then prorated the remaining $150 into 6 $25 payments added to the next 6 month s bills. We could handle that easily and have had no issues since. I don’t know if every water company does this, but it never hurts to ask for an adjustment when it’s an unusual situation.
I’m grateful to not have life shattering news. That’s really awesome that your water company has a “stupidity fund” that helped you out! What a relief!
Torrie @ To Love and To Learn says
I’m so glad to see another post from you! I kept checking the blog and hoping you hadn’t decided to stop blogging. I’m sorry the past few months have held a lot of hard things, big and small, for you. Here’s hoping that summer will hold some relief and relaxation for you.
Very helpful to see your strategy for handling unexpected expenses. I always love seeing how other families handle their budgets.
Thanks for not giving up on me Torrie! 🙂
That is a crazy water bill! Thank you for sharing your strategy and how you attack unexpected expenses. I have missed reading your money wisdom. Welcome back!!
Thank you Karen! It’s good to be back!
I was so happy to receive your email and read your blog post. I have missed hearing from you.without your influence we would not be debt free. It was like hearing from a long lost friend. I’m sorry to hear about your water bill but glad you had the means to pay it. I look forward to hearing from you and continuing to learn. My biggest struggle right now is the price of groceries, I’m always over budget! I also can’t save as quickly as I’d like. I’m also a bit frustrated with the interest rates on my savings. All in all though, we are well, thanks to you.
Thank you for the kind words Sherrie! I’m glad you’re here!
Sweet Simplicity Mom says
I just wanted to say that I’m glad you came back to post. I pop by the site every few days to see if there’s anything new and I was worried about you all!
Thanks for not giving up on me! 🙂