I know fall is just beginning, but my mind is edging toward winter. Why? I’m reviewing our family savings and looking at how much we’ve saved to buy heating oil. (We still have an oil furnace). And I don’t want a repeat of what happened last winter.

There was a day, just before we hit a major cold snap, when I kept fiddling with our thermostat. The house just didn’t feel warm enough. I was pretty sure I heard the furnace running, so I adjusted the heat, put on a sweater and went on to other things.

I should have known better. It was a Saturday, and by 2 p.m. I realized the house was getting colder…and colder…and colder. We thought maybe our furnace was malfunctioning. But my hubby checked and we had run out of oil. Drats! (Photo by Carl Mueller)

My husband and I are usually pretty good about keeping the tank filled. We check the oil level in the tank regularly and order more oil about once a quarter—sort of our version of dollar-cost averaging when it comes to buying heating oil.

But last year, we were a little late checking our oil level, and we didn’t keep a close watch on how much we were using. In our defense, oil prices went sky-high, so the amount we had saved each month in our “oil savings account” (really just a subcategory in Quicken of our regular savings account) didn’t buy as much oil as we actually used. I know that some folks use the auto-fill or “budget pay” programs with their oil companies, but we’ve never done that.

If you are a “pay as we go” customer like us, you know that running out of oil on the weekend is the kiss of death. You can’t get anyone to fill your tank! I called all the major oil companies in our area. They all stopped delivered at noon on Saturdays, and they don’t deliver at all on Sunday.

The one helpful thing I learned in all this: In a pinch, you can actually fill your home heating oil tank with diesel gasoline you buy at your local gas station. (*If you do this, try at your own risk! Our heating oil company suggested the idea to us, but you’re on your own if you mess up your furnace.)

Of course, you have to haul it home yourself in those red plastic gas carriers. A few gallons at a time. And you have to pop in quite a few gallons so your furnace doesn’t suck muck from the bottom of your oil tank into your fuel lines. Needless to say, it was a very long, cold day. We did have heat by later that night (thanks to the gas station diesel), but it was an ordeal we’d rather not repeat.

So this month, I’m spot-checking our oil consumption for the year and adjusting the amount we save every month for oil. I can’t yet verify if this strategy works, but I read online that the average household can assume they’ll use 100 gallons of oil per month for the three coldest month of the year—December, January and February. (I think we use slightly less, but I’ll play.) This oil company’s site also says “The other nine months of the year will use about the same heating dollars as the three coldest winter months.”

That’s a pretty convoluted explanation, but here’s how I figured it. For the 3 coldest months, figure on 300 gallons of oil. In the winter of 2011-12, we paid $4.11/gallon for oil, or $1,233. This site says we’ll pay the same for the other 9 months of the year, or another $1,233. That’s $2,466 a year for oil. With this calculation, we should be saving about $205 per month for heating oil. Oops! We’re short, so we’ll have to fix that.

In my plan, I assumed a worst-case-scenario price of $4.11/gallon. However this New York Times article indicates that heating oil will be closer to $3.79/gallon this fall/winter. Maybe we’ll get lucky and pay less.

We’ll still buy oil quarterly, with cash we’ve saved. So this month, we’ll fill up our tank again—hopefully at a better price than during the cold of winter.

On that frigid, no-oil Saturday last winter, my daughters thought it was fun to bundle up and build a fire like Little House on the Prairie times, but I was not so happy playing pioneer. I’m keeping a closer eye on our oil use this year.

How about you? If you still have an oil furnace, how do you watch your oil use and budget? Any tips to share?