Sidestep the shock of unexpected bills by smoothing out payments and making regular, automated instalments that can be planned well in advance.

Ever experience that sinking feeling when you’ve opened a bill that you can’t possibly afford to pay? The shock of receiving a big bill – or worse, a number of them arriving at the same time – can be extremely stressful. Thankfully, by setting up bill-smoothing payments you may avoid these bombshells.

What is bill smoothing?

The goal of bill smoothing is to make budgeting easier by setting up regular, automated payment plans for businesses you normally get bills from, like electricity, gas, water and telecommunications companies. This way, you’re not forced to pay the whole, unknown amount in one go, and face fewer unexpected fluctuations.

How do I set up bill smoothing?

There are two simple ways:

Have your utility provider set it up for you

If you have trouble paying your bills, you may be able to implement a formal bill-smoothing plan by talking to your utility providers1  and asking them to set it up for you. The provider will tally up your spending over the last year and divide it by 12 months to get a monthly average – you can organise weekly or fortnightly calculations if you prefer. You then organise automated direct debit payments of this amount from your everyday account.

In theory, you’re paying more when your usage is lowest, contributing to a nice surplus that can cover usage at its peak. If you end up contributing more money than your actual bill amount, you’ll be rewarded with a refund or credit. You can also press pause on payments and restart them when you’ve used up your credit. On the flipside, if the cost of your energy, gas or water usage is greater than expected, you may be left with a ‘settlement’ bill at the end of the year to cover additional costs.

Set it up yourself

Complete the bill-smoothing process yourself, working out your average weekly, fortnightly or monthly spend. It’s a good idea to add in a buffer, say 5–10%, to cover things like annual rate increases.

Once you’ve figured out the amount and frequency, pay that amount into a separate bank account you set up specifically for this reason. Then, you should have accumulated enough funds in this account to cover your bills.

You can do this with pretty much everything you spend money on, from your groceries to your rent, car registration, mobile phone and rates.

Why set up payment plans?

Because it’s a great feeling when you get a ‘bill’ that’s in credit. It can also mean reduced credit card payments, if you’ve been using them to cover bills in the past. And while you’re talking to your utility providers about payment plans, you can potentially save even more money by asking them about switching you over to a better plan.

Should I try bill-smoothing payments?

Bill-smoothing payments work well for a wide range of people including those with irregular incomes, people on tight budgets, and those who wish to add a layer of discipline around paying bills and managing their money.

A few more things to consider about bill smoothing

One potential downside of formal bill smoothing is you may miss out on bank interest that you would otherwise earn from having the money sit in your account, rather than in the account of the company you’re paying. Which is why doing it yourself, informally, is quite appealing. You can try paying money into a separate bank account, like the AMP Saver Account – in this way you’re earning interest while still contributing to a purse that’s set up specifically to cover your bills, and nothing but your bills.

1 Origin Energy, Red Energy, AGL, Power Direct, Diamond Energy, Click Energy

Learn more about the AMP Saver Account

What you need to know

The credit provider for all banking products is AMP Bank Limited ABN 15 081 596 009, AFSL and Australian Credit Licence 234517. Approval is subject to AMP Bank guidelines. Terms and conditions apply and are available at or by calling 13 30 30. Fees and charges are payable.

Any advice and information is provided by AWM Services Pty Ltd ABN 15 139 353 496, AFSL No. 366121 (AWM Services) and is general in nature. It hasn’t taken your financial or personal circumstances into account.

It’s important to consider your particular circumstances and read the relevant product disclosure statement, Target Market Determination or terms and conditions, available from AMP at, or by calling 131 267, before deciding what’s right for you.

You can read our Financial Services Guide online for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. You can also ask us for a hardcopy.

All information on this website is subject to change without notice. AWM Services is part of the AMP group.