Our Annual Bill Paying Plan

For most of my financial life, I have got by just paying the "minimum payment due". Obviously not a good thing, especially when paying credit card, car, and other debt because you can justify any loan amount if you are only looking at "small monthly payments" as opposed to the total amount owed.
Fortunately, our debt is just about paid off so there won't be any minimum monthly credit card or car payments, however, now I am looking at the monthly payments on our regular bills and have come up with a new annual bill paying plan. Here's how it will work:

• Our current debts include a mortgage payment (which includes property tax and house insurance), health insurance, car insurance, water, garbage, sewer, electric, gas, cable, cell phones, tithe, school for a grandchild, and taxes.

• As soon as we move (our house is in the process of being sold) and we become nomadic, our bills will drop to health insurance, car insurance, cell phones, tithe, school for the grandchild, and taxes.

We plan to pay these remaining six bills on an annual basis. We are doing this for a couple of reasons--one, while we are traveling, we won't have to worry about paying monthly bills, and two, often when you pay annually instead of monthly, you get a discount. In January we will pay $600 for a year of health insurance and $200 for six months of car insurance, putting $200 in savings for the second half of the year's car insurance since this can only be paid bi-annually. I have already put aside $500 for our grandson's school (in the Philippines, you have to actually pay to go to school, even elementary school), and we also have money in savings to pay our 2010 taxes which will be due in April (since I am self employed we always end up paying something to the IRS). The only things that we aren't paying annually are the cell phones (they are still on a contract so we will be paying this bill monthly), and tithe (since I tithe 10% of my income and have no idea how much income I will have in the coming year).

I hope to reduce these bills even further in a few ways: obviously health insurance will be a constant bill and at this low price I am more than happy to pay it however it will drop in half in a couple of years when hubby goes on Medicare. We think that eventually we may sell the car and be totally car free so that would preclude the need for car insurance. Our cell phones will eventually be of the pre-paid variety and I think our taxes will be reduced significantly beginning in January because I won't be working (my goal is to live so minimally and need so little that we end up paying zero taxes). Tithing will continue as usual at 10%, and while we are in the Philippines next month, I will talk to the grandson's family about setting them up a small business of some sort with some seed money so that they can pay for his school out of the proceeds of the business thus ending our commitment to pay his school fees for the next decade or so.

Obviously there will be other variable costs we will pay just for living like food, clothes, sundries, and "rent" of sorts to whoever we are staying with but these will be reduced as much as possible (and will be some good topics for future blog posts!).