How to Save Money on Utility Bills

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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.

Don’t give up. You don’t need to ditch the AC during a July heatwave, but you could turn up the thermostat a little and save a lot. Similarly, hot showers are great, but taking shorter ones and lowering the temperature in your water heater can help you cut back on your expenses.

Energy is expensive and saving it has real financial benefits. According to the U.S. Department of Energy, America’s 115 million residences collectively use an estimated 22.5% of the country’s energy output and the typical family spends $2,200 a year on utility bills.

3 Steps to Save on Utilities

There are plenty of easy ways to save on electricity, gas, air conditioning and water bills by being more mindful about how energy is used in your home or apartment.

Below we’ll cover three main utilities to save on: electric, water, and heating and cooling. We’ll explain how lowering usage of these can save you money and how to accomplish those savings.

We’ll also give details on long-term energy efficiency investments, and list many other ways to save money on utility bills.

1. Take Steps to Reduce Your Electrical Usage

Using less energy is the obvious and best way to save money on an electric bill. Using less energy can lower your utilities bill by as much as 25%.

Electricity for lights, powering electronics and other things accounts for about 12% of a home’s energy usage. If you have electric heating in your home, it’s likely one of the biggest parts of your utility bill.

Here are some suggested improvements that can reduce electrical usage. Where we can, we include how much each change can save you.

  • Energy-efficient lightbulbs that have the Energy Star label can add up to $75 per year in savings.
  • Solar panels can drop the cost of electricity and eventually provide free energy. One estimate is that solar panels can pay for themselves in about eight years.
  • New appliances with Energy Star seals are more energy efficient than old ones. Appliances eat up about 13% of a household’s energy costs.
  • New office equipment with Energy Star labels use 75% less energy than older models.
  • Update all of your electronic equipment. Timers, power strips, motion-detector switches and WiFi-equipped products can help save electricity.
  • Ask for an energy audit from your utility provider. This service is often free and can identify other ways to save.

If you need help paying your electric bill, look into government assistance programs. One of the biggest ones is the federal Low Income Home Energy Assistance Program (LIHEAP).

Also check with your power company to see if it has an energy cost management plan. It won’t trim your annual costs, but will more evenly distribute monthly payments. Utility bills will increase in spring and fall, but bills in high-usage months in the summer and winter will be lower.

2. Lower Water Bills

Take a look at your water bill and you may be surprised at how much water you’re using.

The U.S. Department of Energy reports that the hot water heater is responsible for about 17% 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. Labels on Energy Star water heaters will detail how much less energy will be used with the new tank. A tankless heater, which only warms water as it’s used, saves 30% more energy than conventional tank heaters.
  • Repair leaks on toilets, faucets and dishwashers to save 20 gallons per leak, per day.
  • Install low-flow toilets or convert existing ones to save two to five gallons per flush.
  • Add aerators to faucets to reduce the amount of water used and increase water pressure. Aerators attach to the faucet head and add air pressure into the water stream. They can save 17-27 gallons per day.
  • Buy an Energy Star dishwasher and washing machine and save 20-30 gallons per laundry cycle.
  • Use that new dishwasher instead of hand-washing dishes to save 2-4 gallons per load of dishes.
  • Shower for one or two 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 should lower your bills considerably.

Here are some ways to save on gas utilities and other costs of heating and cooling your home:

  • Adjust the thermostat. Lower the thermostat to 68 degrees in winter and to 78 degrees in the summer.
  • Get a programmable thermostat that sets more efficient temperatures when you’re away or asleep.
  • Insulate your home better 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 at least every three months.
  • Fix leaky ductwork for your heating, air conditioning and ventilation ducts.
  • Plant trees on the sunny side of the house to create shade and lower inside 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. This will let in less sunlight and offer better insulation.
  • Adjust temperatures on your refrigerator to 38 degrees and on your freezer to 5 degrees.

Long-Term Energy Efficiency Investments for Homeowners

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

If you have the money to spend and plan on living there for years, long-term investments in a home can pay off will lower utility bills for years to come.

Here are some long-term investments to help homeowners 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 $13,102 for a 5-kilowatt residential solar system in 2020, according to SolarReviews. That’s after a 26% federal solar tax credit that’s scheduled to end in 2022.
  • Install a cool roof to stabilize temperatures in unconditioned places such as a garage or bonus room.
  • Install a tankless water heater. It costs $3,500 to $4,500 to buy and install — compared to $800 for a whole house tank — it uses a lot less water and lasts longer than a traditional water heater.

More Ways to Save

Lowering your utility bills shouldn’t be too hard. Just taking small steps such as replacing lightbulbs, shorter showers, and adjusting the thermostat can add up to big savings over time.

For more savings, try bigger steps like replacing old appliances and windows, and installing solar power. Some steps may require long-term investments, so do the math to ensure the savings will make them worthwhile.

Lowering utility costs aren’t the only ways to save money. Looking for cheaper housing to save on rent can be worthwhile.

» Find More: Tips for Saving Money

If you have other debt problems, consider speaking with a credit counselor about lowering your monthly debt payments through a debt management plan. They 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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