Expect to pay more for winter heating bills

Get those down blankets and wool hats ready. The 2008-2009 winter heating fuel projections are out and home heating costs are expected to increase across the country compared to '07-'08 levels.

The Energy Information Administration, the government agency that tracks fuel and energy consumption and expenditures, issued its short-term outlook for the winter heating season that starts Oct. 1, 2008, and runs through March 31, 2009.

Rising fuel costs
If projections hold true, average U.S. heating oil prices could spike by 31 percent per gallon with household expenditures expected to increase by 36 percent. Natural gas users may expect to pay an average of 22 percent more while propane prices will rise 14 percent and electricity 9 percent over last winter.

It's not good news given how much more families are spending on food and gasoline these days.

As CreditCards.com reported last winter, cash-strapped consumers are relying more on credit cards to pay higher utility bills and more utility companies are offering credit and debit card payment options. (See interactive map of utilities accepting credit card payments.) Credit counselors, however, warn against using credit cards to pay basic living expenses unless you pay the credit card bill off in full in each month. With interest and other fees tacked on, paying with plastic adds additional costs to an already high expense.

 Advisers say establishing a budget, sticking to it and setting aside money in a rainy day fund to cover unexpected expenses (like skyrocketing fuel bills) will help families better ride the current economic downturn.

Living paycheck to paycheck
The winter heating fuel projections may sound ominous for those living paycheck to paycheck. They have no safety net protect them from rising utility bills.  A new online poll released this week by CareerBuilder.com (the online job search site), found that nearly half of workers (47 percent) say they always or usually live paycheck to paycheck.

The poll, conducted by Harris Interactive, surveyed 7,192 U.S. employees ages 18 and over from May 22 to June 13, 2008. The margin of error was plus or minus 1.86 percentage points.

A quarter of those surveyed said they don't put aside any money for savings each month; 42 percent say they would need to earn an additional $500 per paycheck to live comfortably.

See related: 7 tips for paying winter heating bills, Poll: Gas, oil prices may drag down '08 economy, More utilities allow credit card payments, List: Utilities that accept credit cards