Utilities are a staple of life. They ensure that your household functions properly and remains comfortable and livable. But utilities can be costly for homeowners, landlords and even renters.
The typical U.S. family spends $2,060 on average per year for home utility bills, according to the U.S. Department of Energy. Yet what you pay depends on several factors, including the size and quality of your living space, the surrounding climate, and your usage patterns. For example, areas prone to extremes in temperature can lead to higher usage of air conditioning and heating systems. Areas where transportation and infrastructure costs are higher can see increases in utility prices, too.
What are utilities?
Utilities fall into six categories:
- Electricity/gas (in addition to heating/cooling, this covers lighting and general electrical needs)
- Landline phone
If you're moving into a new place, you can sometimes find out the average cost of utilities in that area by asking a landlord, apartment manager, or realtor.
If you're renting, the landlord or manager may understand utility costs from other residents or may be able to connect you with someone currently living there. If you're buying a home, a realtor should be able to provide you with copies of the current homeowner's utility bills.
What impacts the cost of utilities?
These factors can affect the average household utility cost:
Where you live: If you’re in a temperate climate, utilities won’t cost as much because there’s less need for constant heating in winter and air conditioning in summer.
Your use of resources: Your average utilities cost depends on your use of electricity and gas. If you leave the thermostat at 72 degrees in winter, you’ll pay more than you will if you set it at 68 degrees. If you lower the heat when you’re not home, you’ll also pay less.
Installing a smart thermostat in your home is one convenient way to manage your utility usage. Many of these smartphone-controlled devices let you view your weekly or monthly usage history, which gives you a clearer picture of how often your heating and cooling systems are turning on and off. This helps you see opportunities to raise or lower your thermostat at certain times of day - or turn the system off completely - to save money.
How energy efficient your home is: Insulation and windows make a big difference in the average utilities cost in a home. Energy can easily escape if there’s no insulation or properly installed windows to protect that air transfer. Old, single-pane windows can also be drafty and contribute to heat loss.
Size of your home: Heating, cooling and lighting a home that's 2,500 square feet will cost more than a home that's 1,400 square feet. It's also important to consider the home's layout. For example, spaces with open floor plans generally cost more to heat and cool than homes that are more compartmentalized with separated areas. In these homes, it's often possible to shut vents or doors when the rooms aren't in use and don't require heating or cooling.
Non-energy-related utilities and their costs
Of course, there's more to utility costs than just energy. How much are utilities in non-energy areas?
- Trash/recycling: Curbside trash and recycling services are often included in city or town fees. But those paying independently should budget $10-$40/month.
- Water: In 2016, American households spent, on average, $15-$77 a month for water, according to the research group Circle of Blue, which focuses on environmental issues.
- Landline: Many people rely on mobile phones, but for those wanting a landline or needing it for internet service, expect to pay $15-$45 a month; the higher cost includes long-distance services. If you prefer to use the internet for making phone calls, voiceover IP service bundles are another option and cost around $20 a month, depending on the number of minutes you purchase in your VoIP plan.
- Internet/cable/phone: A triple package of internet, cable, and phone services average $165 per month; without the phone, the average is $132 a month. Online media-streaming services are an alternative to paying for cable, and they cost an average of $10 per month compared to $60 for a basic cable package.
How to save money on utilities
The U.S. Department of Energy offers tips about ways to save on energy costs. Consider the following:
Appliances: About 13% of a home’s energy costs come from appliances. When buying new models, look for the Energy Star label. Energy Star appliances meet or exceed the federal minimum standards for energy efficiency. For example, a new Energy Star-labeled refrigerator uses at least 15% less energy than one without the label and 40% less than models sold in 2001. Energy Star appliances show their annual energy consumption on their packaging, which lets you compare appliance energy costs.
Windows: Leaky or old windows can account for 10%-25% of heating costs due to warm air escaping. Consider replacing windows with double-pane windows or installing storm windows in winter.
Lighting: Lighting accounts for about 12% of a home's energy budget, so changing to energy-efficient bulbs and remembering to turn lights off when they're not in use can save money. Switching to smart bulbs is another option that can save on energy costs. If you leave home and forget to turn lights off, simply use your smartphone to shut down the smart bulbs remotely so they don't run for the duration of your absence.
Knowing average household utility costs can help you reduce your use of energy and save money. Of course, there are other factors that go into home ownership and maintenance. Learn about the cost of homeowners insurance and how you can reduce your premium with Nationwide discounts on home insurance.