How to Save Money on Utilities

According to the federal government’s Energy Star program, U.S. households spend more than $2,000 a year on utilities. Hundreds of dollars of your hard-earned paycheck go towards electricity, heating and cooling, water, and gas each month, and you may not realize how many of those costs you can avoid.

Various factors affect your home’s energy bill, including its geographic location, building type, and the number of people living in your home. However, you can learn several ways to cut down on the amount of energy you use throughout your home, with some methods more reliable than others.

Examine your current utility bills

Before you can begin implementing ways to save money on your utilities, you should understand how much money you currently spend.

Look at your most recent energy bill; it will most likely break down your costs into gas usage and electricity usage.

You might use natural gas to heat water and power your oven, dryer, and furnace if they are gas-powered (they may all be electrical). Your electricity usage comes from any appliances and fixtures plugged into outlets, such as your refrigerator, lights, dishwasher, chargers, and television, along with your heating and cooling units.

You should also receive a monthly water bill that details how much water you use and the per-thousand-gallon block rate your service provider charges.

All of the above utilities use energy. To gain a more in-depth understanding of your energy usage and how it contributes to your utility bill, you can schedule a home energy audit by a professional auditor.

The auditor will look at your past utility bills and perform a room-by-room inspection to understand where your home uses the most energy. You can use this information to determine what areas of your energy use you need to change.

You can also contact your utility companies if you have any questions about your specific utility usage.

Average cost of utilities

According to the U.S. Department of Energy, the average U.S. family spends $2,200 a year on utilities, which comes out to around $183 a month. Factors such as your family’s size, the location of your home, whether you rent or own, and the kinds of utilities you use will all influence your monthly bills.

Invest in long-term efficiency solutions

The U.S. Department of Energy has released dozens of resources to help homeowners reduce their energy use throughout their properties. This department emphasizes that replacing appliances and fixtures with energy-efficient options is one of the most effective ways to use less energy each month and save money on utilities.

Long-term efficiency solutions are one-time investments that will cut down your energy costs each month. Though they may initially cost more money to purchase and install, you will notice significant savings over time.

Solar panels

Many American families have begun installing solar panels on their roofs to use as their source of electricity. Though solar panels require a sizable up-front investment, the money you will save over time on your electricity bill makes them well worth the cost.

A 6 KW solar-power system will cost between $11,000 and $13,000. However, you can expect to save a total of $12,000 to $50,000 over 20 years of use. Even better, most solar systems last around 40 years, doubling those savings.

Low-flow shower heads

Low-flow faucets and showerheads are smaller investments that cost around $10 to $20 each, but they can reduce the amount of water you use by up to 60%.

Electric space heating and cooling

Many homes utilize gas-powered furnaces, but you can save money and energy by installing electric heating and cooling solutions instead. Pair these units with solar panels to further reduce energy use throughout your home.

Water-efficient toilets

You use more water to flush toilets each day than in any other area of your home. Installing water-efficient toilets can reduce your water use by up to 54%.

Lightbulbs

Many Americans use about 5% of their energy budget on lighting, but switching to energy-efficient bulbs can provide the same amount of light while using less energy.

Consider replacing traditional incandescent bulbs throughout your home with halogen incandescents, compact fluorescent lamps (CFLs), or light-emitting diodes (LEDs) to save money on your utility bill.

Energy star appliances

Energy Star appliances cost less money to operate than traditional ones because they use less energy. “Energy Star” is a label awarded by U.S. Environmental Protection Agency (EPA) to products that meet strict energy-efficiency guidelines and requirements. Consider replacing your refrigerator, dishwasher, clothes washer, dehumidifiers, and air purifiers with Energy Star models to cut down your utility bill.

Insulation

Adding insulation to your home will seal your property against outside temperatures and reduce the work of your heating and cooling systems. A professional energy auditor can help you determine where air leaks are located in your home and suggest insulation solutions.

Energy-efficient furnaces

If your furnace is more than ten years old, it probably costs you more money to run than it is worth. Consider replacing your outdated furnace with an energy-efficient option.

Look for furnaces with a high Annual Fuel Utilization Efficiency (AFUE) rating. The minimum rating is 78%, but some of the most energy-efficient models have a 90% or higher rating.

Reducing energy use

The amount of energy your utilities—such as gas, heating, cooling, and electricity—use correlates directly to your utility bills’ costliness. Along with installing energy-efficient appliances and fixtures throughout your home, you can also reduce your personal energy use by changing your daily behaviors.

Here are some ways to reduce your energy use and cut down electricity, heating and cooling, gas, and water costs.

Electricity

Follow these tips to save money on your electric bill:

Unplug electronics: As often as you can, you should unplug your electronics when you do not actively use them, and you can save around $100 per year.
Use energy-efficient settings on your dishwasher, washer, and dryer: Check your appliances for energy-efficient settings that will reduce the amount of electricity they use. At their most efficient settings, these appliances can save the average household around $40 – $50 per year.
Turn off lights after leaving the room: Make sure to turn off all of the lights once you leave a room. Installing smart lighting in your home makes it easy to control lights in unused rooms at the push of a button. Replacing your light bulbs with energy-efficient fixtures can save you around $75 per year.
Implement daylighting: The sun provides free, energy-efficient lighting that you can utilize to light your home. Open shades and blinds to let light in during the sunniest parts of the day and minimize electric lighting during these times.

Heating and cooling

Heating and cooling is the largest area of energy consumption in your home. Follow these tips to reduce the amount of energy that these units use:

Change filters and clean vents: Your furnace and air conditioner function most efficiently when they are clean and free of dust and debris. Change your furnace air filters and clean the vent covers often to reduce energy costs. Regular filter replacements and cleaning can improve your system’s efficiency by up to 15%.
Adjust your thermostat throughout the day: Your house does not need to stay at the same temperature when you are sleeping or when no one is home. Get into the habit of adjusting your thermostat to reflect the activity in your home. Installing a programmable thermostat can reduce your annual energy costs by up to $180.
Close off rooms you do not use: If you have rooms in your home that you rarely use, keep their doors and vents closed. Doing so will turn your most-used spaces into heating and cooling zones.
Be mindful about when you use appliances: Cooking a meal in the oven heats the room quickly, leading your air conditioner to work harder to get your home back to your desired temperature. Consider cooking outside or using smaller appliances, like microwaves and toaster ovens, during the warmer months.

Natural gas

Nearly half of all U.S. residents use natural gas to heat their homes, and many use gas to fuel their water heaters and ovens as well. If you use natural gas in your home, you can cut down your energy use and save money on your gas bill with these tips:

Cut down stove use: If you have a gas-powered oven, much of your gas bill probably comes from cooking dinner and heating pans on the stove. Microwaves and toaster ovens are more energy-efficient appliances that cost less to run. Matching your pot and burner’s size will prevent heat loss and can save you up to $18 per year.
Use less hot water: Many water heaters use gas as their energy source. If your gas bill is high, you should reduce your hot water use by taking shorter showers, lowering your shower temperature, and washing dishes in a basin rather than running water. You can also install an Energy Star-certified heat pump, which will save a family of four up to $350 per year.
Insulate your gas-powered water heater: Insulating your natural gas water storage tank can reduce heat loss by 25% or more. Follow the manufacturer’s instructions about insulating your tank, or contact a professional to install insulation instead.
Lower your water heater’s thermostat: The U.S. Department of Energy recommends setting your water heater thermostat to 120 degrees F, and you will save up to $61 per year.

Water

Americans use 80 to 100 gallons of water in their homes each day. Here are a few easy ways to reduce your water use and save money on your water bill:

Watch out for leaks: A leak that drips once a second will cost you $1 a month. It may not seem like much, but it adds up over time. Check your pipes and faucets regularly to identify leaks.
Water outdoor plants during cool parts of the day: If you live in a dry climate that requires you to water your lawn or landscaping, wait until the morning or evening to do so. The water will evaporate more slowly so that you will not have to water as often.
Take shorter showers: Showers are some of the most extensive water-wasters in residential homes. For every minute you shorten your shower time, you save about five gallons of water. In other words, if you cut your shower time by two minutes a day, you save 3650 gallons of water per year.
Conserve water strategically: You should avoid letting the water run straight down the drain without using it. If your sink water takes a minute or two to heat up, collect the room-temperature water in a pot to water plants or cook pasta while you are waiting. Always consider how you can utilize water that would otherwise go to waste.

Summary

No magic solution exists that will instantly reduce your utility bill. Instead, you will need to make many small changes to your day-to-day life, along with some long-term investments, to reduce your overall energy use.

Once you begin implementing these changes throughout your home, you will start to see a dramatic decrease in your monthly utility bill.