Utility Bills 101: Tips, Average Costs, Fees, and More

Unless you live off the grid, most utilities—like electricity, gas, water, garbage, internet, and cable—are going to periodically cost you a buck or two. In fact, the rule of thumb for apartment dwellers is to budget at least $200 per month for utilities.¹

Considering the average consumer will spend 7% of their annual income on energy,² it’s important to know where all of that money’s going.

Let’s take a look at what you should be paying for your utilities—and we’ll show you how you can trim your energy costs along the way.

Heating and cooling: Why is it the biggest utility expense?

According to the US Department of Energy, the typical US family spends at least $2,200 per year on energy bills³—with nearly half of that paying for heating and cooling.⁴

This might seem like a large chunk of change, but these costs all depend on where you live, the size of your house or apartment, and (most importantly) whether you make smart decisions about conserving energy.

A bigger house often means a bigger bill

Let’s start with size. For apartments, the median size in multifamily units is 1,074 square feet.⁵ A smaller apartment—if it has modern windows and is properly insulated—will cost less than a large home to keep warm during the winter and cool in the summer.

In terms of houses, according to the American Enterprise Institute, today’s new homes, at an average of 2,690 square feet, boast more than double the living space per person than homes in 1973.⁶

Coupled with greater energy efficiency than their earlier counterparts, however, new homes are going to be less expensive per square foot to heat and cool than in previous decades.⁷

How to save on heating and cooling your home

The US Department of Energy offers online tips for saving energy and therefore money, but there’s one tip that jumps out to us above the rest—keep an eye on your thermostat.

Our recommendation

Upgrade to a smart thermostat. Switching from a conventional thermostat to a smart thermostat can save you 10–12% on heating and up to 15% on cooling.⁸

Over time, smart thermostats adapt to your temperature preferences and automatically adjust their settings to keep you comfortable when you’re home and save energy while you’re away.

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Electricity: What’s the cost of keeping the lights (and fridge) on?

If your average electric bill seems higher than ever before, that’s because it is! In 2017, the average price per kilowatt-hour (kWh—the unit of measurement for electricity) for the residential US was 12.90 cents, according to the US Energy Information Administration.9 At the start of 2001, the price of electricity was only 7.73 cents per kWh.¹⁰

How does that translate into how much you’ll need to pay per month? It depends on where you live. According to WalletHub.com, some states fare better than others—New Mexico being the most affordable state to power your home in and South Carolina being the priciest.¹¹

Some appliances and electronics use more power than others

It may come as no surprise that running an electric clothes dryer uses more kWh than, for example, charging your mobile phone.

Silicon Valley Power (a municipal utility provider in California) breaks down energy use by appliance, basing energy use on a little over 11 cents per kWh and average conditions.¹²

How to save on your average electric bill

The two fastest ways to trim your power bill are to invest in energy-efficient lightbulbs and unplug electronics and appliances when they’re not in use.

Replacing your old incandescent lightbulbs with energy-efficient alternatives can save you $75 per year,¹³ while unplugging your appliances and electronics when not in use can save you over $100 per year.¹⁴

Our recommendation

Invest in energy-efficient lightbulbs and smart power strips. The benefits of energy-efficient lightbulbs are pretty straightforward, but investing in a smart power strip can save you the hassle of unplugging individual electronics or appliances when not in use.

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Natural gas: How much does it cost to keep warm?

Natural gas is used to warm your house, to keep the hot water running, and, in many instances, to cook. You typically pay the gas company to procure the natural gas and deliver it to your home.¹⁵

Reading your gas bill may feel like reading a science report, so let’s get down to the most important acronym, BTU. It’s short for British Thermal Unit, a unit of energy.

The average US household consumed 63 million BTUs of natural gas in 2016, costing $604 over the course of the year.¹⁶ Don’t let that number fool you though. Depending on where you live, you may end up paying a higher price for your natural gas.

Gas is more expensive in some states than others

If you live in Hawaii or Florida, chances are you’ll be paying more for gas than the rest of us. Residents of Idaho, Montana, and North Dakota, however, don’t pay nearly as much for their gas.¹⁷

If you’re curious about where your state falls, here’s a chart of the average natural gas cost by state (the term “therm” on the chart equals 100,000 BTUs).

Your bill isn’t strictly based on BTUs, though. You may also see some other items on your gas bill—including taxes and fees. Check with your local provider for details in your state to see what’s included in your bill.

How to save on your gas bill

We understand that most people aren’t willing to move to Idaho just to save a few bucks on their gas bill, so we have a couple of other ideas to save.

Aside from fitting your home with one of the smart thermostats we recommended earlier, the best way to save on your gas bill is to regularly replace your furnace air filter and perform annual furnace maintenance.

A dirty air filter can slow down air flow through your furnace, causing it to work harder to heat your home. Neglecting annual maintenance can also cause key furnace components to operate inefficiently.

In the end, the harder your furnace has to work to do its job, the higher your gas bill will be at the end of the month.

Our recommendation

Replace your furnace air filter at least once every three months. ENERGY STAR even recommends replacing your air filter monthly during the summer and winter seasons to ensure your furnace is running as efficiently as possible.¹⁸

It can be easy to forget when to replace your filter, however. That’s why a subscription service like FilterEasy or Amazon Subscribe & Save is the way to go. You simply select how many filters you need, specify their sizes, and set how often you’d like your filters delivered.

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Water: What’s the cost of H2O?

The EPA estimates the average American family uses 300 gallons of water per day.¹⁹ To put that number into perspective, that’s enough water to fill a six-person hot tub.

How much does it cost to fill this hypothetical hot tub, you ask? According to the nonprofit organization Circle of Blue, it could cost you more than $50 per month (depending on where you live).²⁰

The price of water is on the rise, too. In fact, it rose 41% between 2010 and 2015, and sewer prices and fees rose even more dramatically during that time.²¹

How to save on your water bill

To combat rising water costs, you simply have to use less water.

Turning off your faucet while brushing your teeth is certainly one way to cut back on your water usage. Water-efficient faucets and showerheads, on the other hand, can help you save water without a second thought.

Our recommendation

Install low-flow showerheads and faucet aerators in your home. Conventional shower heads use between three and four gallons per minute.²² Depending on the low-flow shower head you purchase, some use as little as a gallon and a half of water per minute.

You can also purchase low-flow faucet aerators to decrease your water usage in each of the sinks in your home.

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Cable TV and internet: What’s the price of screen time?

In the old days, “hooking up the TV” meant plugging it into the wall and adding a wire coat hanger as an antenna. Back then, television was essentially free.

Today, cable prices are all over the map and most are not regulated by the FCC.²³ You can watch basic channels for free using a digital antenna, but the average cable bill is about $100 per month.²⁴

The monthly cost of your internet will vary widely based on connection type and speed. Slow dial-up connections cost as little as $10 per month, but the fastest fiber optic connections can cost upward of $150 each month.²⁵

How to save on your cable and internet bills

You can often bundle internet and cable into one bill, saving money on both utilities. If you’d rather not bunde your cable and internet, however, check with providers near you to see if there are any promotions you can take advantage of.

Our recommendation

Shop around to find the best cable and internet deal for you. Each of the following providers has a wide range of plans to choose from. Click through to see which best matches your cable and internet needs, and your budget.

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Mobile phone: How much does it cost to stay connected?

Your mobile phone and its ability to connect to towers and via Wi-Fi is the only “utility” you can take with you once you leave the house.

According to the Pew Research Center, 95% of American adults own a mobile phone.²⁶ For most of us, that’s our only phone since fewer than half of US homes still have a landline.²⁷

The major cellphone carriers are constantly changing their prices to compete with one another, but you can expect to pay anywhere from $120 per month to $240 for a family of four (depending on your plan and which carrier you choose).²⁸

How to save on your cellphone bill

The best way to save money on your cellphone bill is to keep an eye on each mobile carrier’s promotions. You’ll often see promotions advertising discounted prices on phone plans (and even new smartphones) if you add an extra line to your plan or switch carriers.

If you aren’t concerned about using a lot of mobile data each month, a prepaid mobile plan may be for you. Prepaid plans are often less expensive than standard postpaid plans, and many of the major mobile carriers have prepaid plan options to choose from.

Garbage: What’s the price of collecting trash?

The cost of collecting trash—on average between $12 and $20 per month—is, in the words of the National Solid Wastes Management Association, “one of a household’s biggest bargains.”

Americans generate about 4.4 pounds of trash every day and, lucky for you, your garbage bill ensures you don’t have to drive it to the waste station yourself.

While recycling doesn’t typically show up as a line item on your garbage bill, Americans with curbside recycling are being charged between 50 cents and $10 per month for the service.²⁹

Sometimes you’ll even see water, sewage, and trash all on one bill with one monthly fee.

How to save on your garbage bill

The best way to save on your monthly garbage bill is to create less garbage. Some cities and private collection services charge per bag, so the fewer bags you use, the less you pay.

If you need to pay a private company to collect your trash, be sure you’re getting the best deal. Shop around with your garbage collector’s competitors to see if you can find a better price elsewhere.

Do you have more ideas for saving on utilities?

Do you have any other suggestions about ways to save money on a particular utility? We’d love to hear them! Share your ideas in the comments below so our readers can benefit from your savings solutions, too.

Endnotes

1. Zillow, “Rules of Thumb for Estimating Apartment Utility Costs”
2. American Coalition for Clean Coal Electricity, “Energy Expenditures by American Families”
3. US Department of Energy, “Energy Saver”
4. US Department of Energy, “Energy Saver”
5. Multifamily Executive, “Multifamily Rentals Continue to Drive Housing Market
6. American Enterprise Institute, “Today’s New Homes are 1,000 Square Feet Larger than in 1973”
7. US Energy Information Administration, “Heating and Cooling No Longer Majority of US Home Energy Use”
8. Nest, “Real Savings”
9. US Energy Information Administration, “Electricity Data Browser—Average Retail Price of Electricity”
10. US Energy Information Administration, “Electricity Data Browser—Average Retail Price of Electricity”
11. WalletHub, “2017’s Most and Least Energy-Expensive States”
12. Silicon Valley Power, “Appliance Energy Use Chart”
13. US Department of Energy, “How Energy-Efficient Light Bulbs Compare with Traditional Incandescents”
14. HowStuffWorks, “How Much Can You Save by Unplugging Appliances?”
15. HouseLogic, “How to Read Your Gas Utility Bill”
16. American Gas Association, “2017 Gas Fact Sheet”
17. The US Energy Information Administration, “Natural Gas Residential Price”
18. ENERGY STAR, “Heat and Cool Efficiently/a>”
19. The United States Environmental Protection Agency, “How We Use Water”
20. Circle Of Blue, “Water Pricing”
21. Circle Of Blue, “Price Of Water 2015
22. Nebraska Energy Office, “Do Low-flow Shower Heads Really Save Money?”
23. Federal Communications Commission, “Regulation of Cable TV Rates”
24. NBC News, “Cable and Satellite TV Costs Will Climb Again in 2016”
25. CostHelper, “Cost of Internet Access”
26. Pew Research Center, “Mobile Fact Sheet”
27. The Verge, “Most US Households Have Given Up Landlines for Cellphones”
28. Consumer Reports, “Best Low-Cost Cell-Phone Plans”
29. Consumers Digest, “The Great Illusion: Curbside Recycling”