Planning for Annual Bills

If you don't have an escrow account with your mortgage company or for bills that are paid annually or semi-annually such as vehicle insurance, take a look at your costs for last year.
Divide the total amount by 12 and put that amount into a separate money market or savings account each month. If it's in a savings account connected to your checking account, you should be able to transfer money easily when the bills come due. Make sure you have a little extra in there to fall back on. By paying annually, you may save money as costs are added to your bill when you have the convenience of paying monthly.

Some credit card companies give you points for paying bills. If you are able to use credit cards wisely, this is another option as long as you pay it off the following month by transferring money from your savings account.

Note: If you have a large amount of equity in your house you should be able to talk to your mortgage company about discontinuing the escrow account. Although interest on savings is low at the moment, you may as well get the benefit of it, rather than letting it sit in an escrow account.

Note: If you are paid bi-weekly you should receive two "extra" checks a year. Plan to use these for annual bills, and lower the amount you save each month.