First, higher gas prices squeezed consumers. Then credit card issuers raised minimum monthly payments. Now, Central Marylanders face stiff increases in their electric bills.
"It might be that final thing that pushes the consumer to the point where they can't handle it," said Patricia Lynch, a certified financial specialist with ClearPoint Financial Solutions in Richmond, Va.
This latest bit of bad financial news hit yesterday, when the Public Service Commission announced that typical residential customers of Baltimore Gas and Electric Co. can expect their electric bills to rise by $743 a year - 72 percent - when price caps come off July 1.
Jerry Henger of North Baltimore expects to rein in his spending when his electric bill jumps. "Instead of going out three times a week or two times a week, I might go out one time. Instead of flying to Florida for a vacation, I might drive to Virginia Beach," said the stay-at-home father.
But Henger said he's concerned about how his elderly neighbor on a fixed income and those making minimum wage will pay their bills.
Consumers should take time now to prepare for the added costs, an average of almost $62 extra each month, experts said.
The first step is to track living expenses, Lynch said: "Do that for 30 days. After that, they will be able to sit back and see what they need to change."
Instead of spending $300 a month dining out, cut that in half, she suggested.
Jim Godfrey, executive vice president of the nonprofit Consumer Credit Counseling Service of Maryland and Delaware, said cable television is usually one of the first expenses that his agency looks to trim when helping consumers. Consider cutting a premium channel, he said, to save some money. Or get rid of cable altogether.
Consumers also should check into updating cell phone plans, Godfrey said. They might find service with more free minutes or other benefits for less money.
Free budgeting help is available from the counseling agency by calling 800-642-2227.
Budgeting doesn't necessarily have to painful, said Jim Ludwick, a financial planner in Odenton.
"They might not give up going to the movies but may go to a matinee [rather] than an evening performance," Ludwick said. "Do you have to take the Acela when you go to New York?" Maybe you can take a cheaper, albeit slower, train, he said.
If budgeting isn't the answer, try other behavior changes. That could mean turning off the air conditioner on hot days or raising the thermostat, experts said.
For low-income households that can't cover the monthly increases, assistance programs are available.
Among them: The Maryland Energy Assistance Program and the Electric Universal Service Program. They won't pay a consumer's entire heating or electric bill but will cover 25 percent to 70 percent of the cost, said Rebecca Soubra, program specialist for the Office of Home Energy Programs in Montgomery County.
Income limits apply. To qualify, monthly gross income can't exceed $1,196 for a single person, $1,604 for a couple or $2,419 for a family of four, Soubra said.
To find out more information and local contact numbers, call the Home Energy Programs at 800-352-1446.
The Fuel Fund of Maryland has stepped up fundraising efforts because it expects an increase in people seeking assistance with energy bills. The fund's average client is a family of three earning $1,300 a month.
Fuel Fund officials also advise low-income families against using a payment plan that would allow them to defer some of the higher electric costs over two years. By doing so, consumers would pay 5 percent annual interest to BGE on the amount of their bill they deferred.
Fund officials want low-income households having trouble meeting electric bills to come to the Fuel Fund instead.
"We would like to help them adjust and figure out how they're going to pay in the future rather than help them incur more debt," said Mary Ellen Vanni, executive director of the independent nonprofit.