How to Save Money on Utilities

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Opening an electric bill during the peak heating and cooling seasons can be a budget-testing experience for American families. You’ve cut back on dining out, reduced your monthly cellphone data usage and even began clipping coupons, but the eye-popping electric bill undermines your effort to balance the household budget.

First thing’s first: Don’t despair. You don’t need to suffer through a July heatwave without A/C or a January frost without heating. Instead, adjust the thermostat a little (up in summer, down in winter) and you’ll save a lot. Similarly, taking shorter showers and lowering your water heater’s temperature can help you cut back on expenses.

It’s no secret that energy is costly. The average cost for utilities was about $117 per month, or $1,405 per year.

5 Steps to Save on Utilities

Lowering your monthly bills doesn’t need to be a complicated venture. There are plenty of simple approaches to saving on utilities, but it’s important to be mindful about how energy is used in your home.

Below, we’ll cover three main utilities: electricity, water, heating, and cooling. We’ll explain how reducing their use can save money and how to accomplish those savings.

We’ll also provide details on long-term investments in energy efficiency and methods on how to save money on utilities.

1. Take Steps to Reduce Your Electricity Usage

Using less energy is the best way to lower your electric bill, and it can even lower your utility bill by as much as 25%.

Electricity for lights, electronics, and other appliances accounts for about 17% of a home’s energy usage. If you have electric heating or cooling in your home, that’s likely one of the biggest expenses on your utility bill.

Here are some suggested improvements that reduce electricity usage. We include how much each change can save you, where we can.

  • Energy-efficient lightbulbs with Energy Star labels use 90% less energy than standard bulbs and save about $55 over the lifetime of the bulb..
  • LED lighting can save up to $225 a year. They produce the same brightness as incandescent bulbs but have a lifetime 15 times longer and use up to 90% less energy. They’re better for the environment, too, and that’s a win for everyone.
  • Solar panels can drop the cost of electricity and eventually provide free energy. Estimates are that solar panels can pay for themselves in about 6-12 years.
  • New appliances with Energy Star seals are more energy-efficient, using 20% less energy than their older counterparts.
  • New office equipment with Energy Star labels, including computers, monitors, and imaging equipment, can improve efficiency while lowering energy use. Computers with Energy Star certifications can even use up to 65% less energy.
  • Maximize energy savings with timers, power strips, motion-detector switches, and WiFi-equipped products.
  • Ask for an energy audit from your utility provider. This service is often free and may identify additional ways to save.

Conscious behavioral changes can also minimize how much energy you use. Remember to unplug chargers when they aren’t in use or when equipment batteries are full. Set your electronics to automatically power down after certain periods of time. Have computers or monitors or both enter rest or low-power modes if you are stepping away for a while. Finally, turn off the lights if you’re leaving the room.

If you need help paying your electric bill, look into government assistance programs, such as the federal Low Income Home Energy Assistance Program (LIHEAP).

You can also check with your power company about an energy cost management plan. While it won’t trim your annual costs, it will even out monthly payments. Utility bills will increase in spring and fall, but bills in the high-usage summer and winter months will be lower.

» Learn More: Ways to Save on Energy in the Winter

2. Lower Water Bills

You may be surprised at how much water you’re using and how much that impacts your sewer bill and your utility bill.

The U.S. Department of Energy reports that the hot water heater is responsible for about 18% of a home’s total energy use.

Here are some ways to save water and money in your home or apartment:

  • Buy an energy-efficient water heater. A tankless heater, which only warms water as it’s used, can shave $100 off your yearly expenses.
  • Use less hot water to give your water heater – and your budget – a break. You can also lower your water heater’s thermostat from the default setting of 140 degrees Fahrenheit to 120 degrees. Even with the lower setting, the water for your showers and dishwashers should be hot enough.
  • Repair any leaks on toilets, faucets, and dishwashers. Based on data from the U.S. Environmental Protection Agency, a faucet that leaks one drop each second wastes more than 3,000 gallons per year.
  • Install low-flow toilets or convert existing ones. Toilets with WaterSense labels can save up to $140 per year.
  • Add aerators to faucets to reduce the amount of water used and increase water pressure. Aerators attach to faucet heads and add air pressure to the stream. Replacing older faucets and aerators with models that have WaterSense labels can save up to 700 gallons a year.
  • Buy an Energy Star dishwasher and save about 2 gallons each cycle, or up to 300 gallons each year. You’ll even save energy while you’re at it. Energy Star models use 12% less energy than older, standard ones. According to the U.S. Department of Energy, these newer, more efficient models don’t need dishes to be rinsed before going in, so you can save even more water – and money – by foregoing the hand-washing or pre-rinsing. The department’s data shows that opting for these models over hand-washing dishes will save more than 8,000 gallons in a year.
  • Buy an Energy Star washing machine to use 20% less energy and 30% less water. Each load can save about 6 gallons of water. Also, try to run a cycle when the washing machine is full. Some models will use the same amount of water regardless of the laundry load’s size.
  • Replace your showerhead with a WaterSense-labeled one. According to the Environmental Protection Agency, this replacement can save 2,700 gallons of water in a year.
  • Shower just a few minutes less to save 2.5 gallons per minute.

3. Save on Gas, Heating, and A/C

Heating and cooling are the biggest expenses on utility bills, so reducing your gas, heating and air conditioning usage can lower your bills considerably.

Here are some ways to save on the costs of heating or cooling your home:

  • Adjust the thermostat. Lower the temperature to 68 degrees in winter and raise it to 78 degrees in the summer. To maximize savings, the U.S. Department of Energy and U.S. Environmental Protection Agency recommends adjusting the thermostat to at least seven degrees from your normal settings to take 10% off of your annual expenses.
  • Get a programmable thermostat to set more efficient temperatures when you’re away or asleep. Smart thermostats can be adjusted from your phone, so you don’t need to panic if you forget to turn off your A/C before going out.
  • Improve your home’s insulation by installing weather stripping for doors and windows, sealing leaks with caulk, and using blinds to deflect solar heat in the summer.
  • Add insulation throughout your home, especially in the attic where energy can easily escape.
  • Clean or replace HVAC and furnace filters. The U.S. Environmental Protection Agency recommends that HVAC filters be cleaned once a month and furnace filters once every three months.
  • Fix leaky ductwork for heating, air conditioning and ventilation ducts.
  • Plant trees on the sunny side of the house. Their shade can lower indoor temperatures.
  • Replace your roof with a cool roof that reflects more sunlight and absorbs less heat than standard roofs.
  • Replace single-pane windows with double-pane ones. They let in less sunlight and offer better insulation.
  • Adjust the temperature in your refrigerator to 38 degrees and in your freezer to 5 degrees.

4. Shop Around for the Best Deal

Your current utility providers may not be the only ones in your area. A quick google search that includes your county or zip code can present you with other options.

Websites like InMyArea will take your zip code and compile a list of providers, along with local averages of utility bills based on the U.S. Census Bureau. It may take a little work – and several open tabs – but your research could lead you to more affordable plans.

5. Run Appliances at Night

Are you an early bird? Night owl? There’s good news for both: using your utilities during off-peak hours can save you money.

Off-peak hours are time frames during the day or night when general usage of electricity is low because fewer people are active. If you’re typically up at the crack of dawn or just climbing in bed at the witching hour, take advantage of your schedule to optimize your savings.

Peak hours vary. They may fluctuate based on the time of year and can depend on your location. Check with your local provider to see what their off-peak hours or “time-of-use” rates are. This will help you determine the best time for running the dishwasher or washing machine.

Long-Term Energy Efficiency Investments for Homeowners

A great thing about being a homeowner is that you have more freedom for improvements than renters.

If you have the money and you plan on living in the home for a while, long-term investments can pay off by lowering utility bills for years to come.

Here are some long-term investments to help save on utilities. Some we’ve detailed above, so we won’t go over them again in depth, but they’re all worth considering for long-term savings:

  • Solar panel installation costs an average of $12,390 for a 6-kilowatt residential solar system in 2023, according to SolarReviews. That’s after a 30% federal solar tax credit that isn’t scheduled to end until 2033.
  • Install a cool roof to stabilize temperatures in unconditioned places, such as a garage or bonus room.
  • Install a tankless water heater. It costs $1,000 to $3,500 to install, uses a lot less water and lasts longer than a traditional water heater. Tankless heaters are also energy-efficient and use up to 34% less energy than storage tanks.

More Ways to Save on Utilities

Saving on utilities doesn’t have to be hard. Small steps like using LED bulbs, taking shorter showers, and adjusting thermostat temperatures can add up to big savings over time.

For more savings, try replacing old appliances and windows or installing solar power. Some steps may require long-term investments, so do the math to ensure the savings will make them worthwhile. You can also look into using a cashback credit card to pay utility bills.

» Find More: Tips for Saving Money

Lowering utility costs isn’t the only way to save money. If you have debt problems, consider speaking with a credit counselor about lowering your monthly debt payments through a debt management plan. The counselor can help you see where else you can be more efficient with your savings if you can’t pay your bills. Energy savings are a balancing act, and every budget is different.

About The Author

George Morris

In his 40-plus-year newspaper career, George Morris has written about just about everything -- Super Bowls, evangelists, World War II veterans and ordinary people with extraordinary tales. His work has received multiple honors from the Society of Professional Journalists, the Louisiana-Mississippi Associated Press and the Louisiana Press Association. He avoids debt when he can and pays it off quickly when he can't, and he's only too happy to suggest how you might do the same.


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