Consider Paying the Bills Yearly Instead of Monthly


American households spend an average of just over $5,500 in monthly expenses.

That means a lot of bills. That number includes everything from mortgage payments and utility bills to groceries, insurance, and entertainment. And while most bills are paid monthly, there are often options to cover some bills yearly.

But is going yearly with some bills really a better payment approach?

Though around 70% of companies make monthly payments the gold standard (and some bills only work through monthly payments (such as power bills), a good rule of thumb may be to take advantage of a yearly option if it’s available.

It may be time for a budget readjustment.

Car Insurance 

While the average car insurance premium is over $1,700 a year, many go for the monthly option for payment (on average: $150). Depending on the coverage needed and the insurance company being used, it may be less expensive to go for the yearly option.

Most insurance companies offer both yearly and monthly options, and the savings by going yearly may be significant. And if the yearly option on current insurance isn’t less expensive than the monthly rate, it may be time to shop around for new insurance.

Life Insurance

Another insurance bill to consider moving to yearly bills for potential savings, life insurance annual premiums are almost always lower compared to monthly payments. Depending on the insurer and the policy details, annual premiums may be around 5% lower than monthly payments.

If one can afford to yearly lump payment, that’s a good discount that adds up over time.

Streaming Services 

TV and music streaming services may offer tantalizingly low monthly costs (anywhere from $5-$15), but if they offer yearly subscription rates they are usually less expensive in the long run.

For example, Hulu offers monthly subscriptions ranging from $5.99 to $11.99, but annual subscriptions are as low as $72. Sundance Now offers monthly subscriptions at $6.99, but annual memberships go for $4.99 a month.

HBO Max has two tiers of monthly subscription plans, $9.99 (with ads) or $14.99 (no ads), but the respective yearly rates are much lower: $99.99 a year with ads and $149.99 a year without.

Gym Memberships 

Almost all gyms offer monthly memberships at various rates, sometimes depending on the services being used. But most financial experts agree that a yearly option may make more sense since gyms typically fork over discounts to those making an annual commitment upfront.

With the average cost of a gym membership hovering around $50 (in big cities it can be twice as much), a discounted yearly membership has the potential to save lots of money on workouts. 


For those with children in pricey private schools, yearly tuition may be the way to go since most schools charge much higher rates for monthly payments. The same rule rarely applies to a large majority of colleges, where there is usually no difference between yearly, quarterly, and semester payments.

Property Taxes 

Property taxes are a fact of life; homeowners have no choice but to pay them. Many forget about the taxes since they are often lumped into mortgage payments by lenders. However, choosing an annual payment plan for property taxes could help save money since many areas attach fees to monthly payments.

Something to keep in mind is that there are myriad ways that individual cities and states calculate property taxes, and it’s best to talk to a local tax collector’s office or to the country treasurer to see if yearly lump payments are accepted.

Credit Cards

If the cash is there, it may be best to pay off credit cards with a yearly model in mind depending on what’s owed. Instead of the minimum each month, it may be best to pay off the most expensive bills first in order to reach other financial goals. Since credit card debt tends to be the most expensive recurring bill, users can make a significant dent in debt by paying as much as possible.

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