Unravelling the Mystery: Why Your Electricity Bill Fluctuates Every Month

Have you ever scratched your head, wondering why your electricity bill is a rollercoaster ride of highs and lows? One month, it’s sky-high, and the next, it’s surprisingly low. This fluctuation can be baffling, and understanding it can seem like decoding a complex puzzle.

But don’t worry, we’re here to help you unravel this mystery of electricity bill fluctuations.

The Role of Meter Readings in Your Electricity Bill

In Singapore, whether you’re an OEM retailer customer or stick with SP Services, it’s SP Services that takes care of meter readings. The only exceptions are if you have an advanced meter installed or if you submit your own meter reading to SP.

SP Services conducts meter readings every two months. In the months when no readings are taken, your bill is estimated based on the average consumption from the previous two readings. This means that your bill might not always reflect your actual usage for that month.

The Impact of Overestimation and Underestimation

When bills are estimated, any change in your electricity consumption can lead to overestimation or underestimation. SP or your OEM retailer will bill you an estimated amount based on your past average usage, not your actual usage for that month.

For instance, consider the SP reading shown above. The months of January, March, and May have asterisks (*) indicating estimated readings. In May, despite an upward trend in electricity usage since April, the estimated usage for May was significantly lower. This is because it considers the average of the last two meter readings (a 4-month period).

How Usage Habits Influence Your Bill

If there are changes in your usage habits, such as using the air conditioner more due to hotter weather or working from home more often, you may see a significant increase in your electricity bill. However, this increase may not be reflected in the next billing cycle but rather in the cycle after that. So, if you notice a change in your usage habits, don’t be surprised if your bill is higher in the following months.

FMS’s Take on Electricity Bill Fluctuations

Understanding the factors that contribute to fluctuations in your electricity bill can help you plan your budget better and make informed decisions about your energy consumption. Keep track of your usage habits and remember that your bill may not always correspond with your actual monthly usage.

While managing your electricity bill is important, have you considered how you could better manage your finances? At FMS, we recommend our clients to invest in dividend funds as a strategy to build passive income. For instance, if a client invests $48,000 per year for 10 years at a 6% yield, the total value of the portfolio after 10 years would be $587,000, generating an annual passive income of $35,220 at a 6% yield.

Building passive income is beneficial for three key reasons:

  1. It provides a steady stream of income.
  2. It helps diversify your income sources.
  3. It can provide financial security in retirement.

However, remember that while building passive income can be a great strategy, it’s also important to manage your regular expenses, such as your electricity bill, effectively.

Ready to Take Charge of Your Electricity Bill?

Now that you understand why your electricity bill fluctuates, you can better anticipate these changes and manage your energy consumption more effectively. Remember, knowledge is power, and in this case, it can also help you save on power!

If you’re interested in learning more about managing your finances and building passive income, subscribe to FMS Financial Insights. We share insights on how to invest and build passive income so you can start making better financial decisions. It’s simple, concise, and impactful. Don’t miss out on our expert advice – sign up today!

For more information on electricity consumption and how to choose the best plan for your home, check out our guides on navigating the open electricity market and choosing the best open electricity market (OEM) plan for your home in Singapore.

If you’re ready to take the next step in your financial journey, book a call with Ben to learn how to create passive income using dividend funds. Hundreds of our clients have already started. Some of them are making $39,600 per year. Start your journey today!

Benjamin Low
Benjamin Low

Benjamin is known as The Passive Income Guy. He has helped hundreds of people to build passive income. He is also a member of the Million Dollar Round Table, and Certified Financial Planner™ (CFP®) and Certified Private Banker (CPB).

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