What are utility bills?
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Utility bills might be one of the first injustices of adulthood, a necessity that you don’t want to spend your hard-earned money on. Common utility bills include electric, gas or oil for heating, water, sewer, and internet.
When you move into a new place, you will likely create an account with your area's utility company. So what can you expect from a utility bill each month? It depends on several factors, like where you live, your utility rates, even current events can impact how much your utilities are.
Regardless of how much your bill is worth, you probably want to be paying less. Luckily for you, we’ve broken down the average monthly costs of various utility bills and how you can save each month.
Whether you own your home or rent an apartment, chances are you’re paying utility bills for many services. Bills typically are due each month but can vary from utility to utility, state by state.
Electricity, gas, water, and sewer are the most basic utility needs.
Extra utility services include things like internet, phone service, streaming services, and cable. We’ve detailed the best way for you to read your utility bill so you can better understand what you are paying for.
When reading your utility bill, look for:
If utility bills are not paid, interest and late fees can accrue on the missed payments, or utilities can shut down services. But, some states and service providers do not allow companies to cut off utilities because they are essential services – make sure you know your rights and various payment options to help you pay your bills.
The average electric bill in the United States is $122 per month. The value of your electric bill will vary depending on your electricity usage, utility rates, what appliances you have, how many people live with you, and the size of your home.
Your electric bill will cover things like your lights, powering air conditioning units, and running appliances. Basically, anything that you plug into an outlet, you pay for through your electricity bill. These expenses are monitored by a meter that calculates the kWh of energy your home uses over the month.
There are a few different ways you can save money on your electricity bill. Practicing energy conversation, like using natural light during the day, can help reduce your bill. Making energy-efficient upgrades to your home, like getting Energy Star appliances, can also go a long way in reducing your electricity bill.
You can also install solar panels, which can drastically cut, or even eliminate, your monthly electricity bill.
Natural gas bills in the U.S. are usually about $60 per month. About 49% of homes in the U.S. rely on gas to run their stoves and clothes dryers, or heat their homes and water. About 4% of homes rely on oil heat for water heaters and home heating and typically have annual oil bills of about $1,500.
Gas and oil bills vary based on the same things as electricity bills, like home size and usage. The cost of both natural gas and oil can also fluctuate wildly based on costs out of the homeowners’ control, like foreign wars, extreme temperatures that increase demand and gas costs.
2023 will be especially harsh, with gas bills expected to be almost $1,000 for the winter. Reducing the thermostat can only get you so far; switching to a heat pump is the best long-term solution to save on heating costs.
One thing to note is that gas and oil bills are much higher in the winter. Over the summer months, gas is typically only needed for cooking or heating up a clothes dryer, resulting in much lower bills.
Water bills vary a lot by state, but homeowners can expect to pay about $80 a month. Some areas may have quarterly water or sewer billing periods, which means the bill will be higher, but you only have to pay it four times per year. Q3 tends to be the highest because of higher summer water usage - garden watering is a burden.
Leaky faucets and old pipes are the biggest things to look out for if you’re trying to save on your water bills! Fix and replace them with a trusted plumber. Being more mindful of water use can go a long way as well. Keep your showers short, and don’t leave your faucet running while brushing your teeth or washing dishes.
In the past, the internet was seen as a luxury, not a necessity. But now, it’s essential to have internet access in 2023. Without the internet, people are limited to the types of jobs they can get and the kind of information they can receive; it even impacts how they access and pay their other utility bills!
The U.S. pays some of the highest fees for the internet in the world, potentially running bills upwards of $100. Consider bundling your internet service with cable, or even a landline phone, to keep the costs lower.
Keep your costs down by practicing energy conservation or upgrading appliances to energy-efficient options.
The biggest way to save is by installing solar panels. The upfront cost of solar can sometimes be daunting, but adding solar panels shields you from rising utility costs, which can increase by 1.8% every year! Because utilities are a business, it is in their best interest to keep raising the prices passed to the consumer.
The best way to combat rising utility prices is to go solar. Solar systems are designed to cover the average energy usage of your home so that the panels can provide enough power to reduce, or eliminate, your electricity bill. In many cases, the electricity bill savings you earn by installing solar panels covers how much you spent on them in just 10 years. That means you get free, renewable energy for the next 15 years!
There are other ways to save on your utility bills, primarily by changing your daily habits to use less electricity and water. You can also consider doing a home energy audit to identify where you’re using the most energy and how to reduce it through repairs and upgrades. Making sure your home is properly insulated can significantly reduce your electric and gas bills!
As we said, utility bills are monthly bills that you can always expect. Allocating money from each paycheck for utility bills is the best way to ensure you have the funds to pay your bills.
If we add up all of the costs from the average bills above, you can expect to pay about $5,424 a year on utilities. So make sure to have at least $300 on hand each month to keep these bills paid.
Remember, utility costs will vary in every location and for every home! They’ll even fluctuate depending on the season. Keep a copy of your monthly bill payment receipts to monitor your average usage to budget more efficiently. As you take a closer look at your bills, you may find that you need to find ways to save. Installing solar panels is one of the most effective ways to lower your energy bills and reduce your reliance on your utility company.