How Much Should You Be Spending on Utilities Each Month?

Using a thermostat

If you’re running your washing machine several times every day or leaving lights on when you’re not home, there’s a good possibility that your utility bills are as much or more than your rent or mortgage. Utilities can add up quickly and, unfortunately, most of the time you don’t know what the cost is until you receive the bill.

Electricity costs run higher in the middle of summer and the middle of winter in an effort to keep your home comfortable. If you use gas for heating, that can be a hefty winter expense as well. If you’re in the habit of doing laundry daily with a few small loads, your water bill is going to get pretty costly. Like bubble baths? You’ll pay for them when your bi-monthly water bill arrives.

The right amount to spend

If you’re working with a budget, and trust me, you should be, your utility costs should be no more than 8-10 percent of your monthly income. That doesn’t seem like much, does it? If your monthly after-tax income is $3,000, that means you should be spending no more than $300/month on your utilities. Preferably less. Thinking back over the last few months, how are your utility bills comparing?

Average energy costs vary by state, but you should still be working to remain within a budget of 10 percent of your income or less.

Key factors to consider

There are other factors that can play into your costs, too. For instance, do you work from home? If so, you’re using more electricity and water than people who work outside the home. The number of people in your home can have an impact on your utility costs. And the average temperatures in your area during the hot or cold months can play a big part in the cost of your electric and gas bills.

Tips for reducing your utility costs

After reviewing your most recent utility bills, you may find that you need to look for ways to cut back so that you can bring your spending into an acceptable range. Here are a few handy tips that can help:

  • Check your hot water heater. The default setting for most is 140 degrees, however, 120 degrees is sufficient for your hot water needs.
  • Repair leaky faucets, toilets, and pipes as soon as you notice them.
  • When able, run your appliances at night. Running them during the day often causes heat and will make your AC work harder in the summer months.
  • Replace air filters every 2-3 months to keep your AC working efficiently.
  • Skip your oven whenever possible. If you’re only warming something up or cooking a small amount, use a counter top convection oven instead of your big oven. It uses less electricity and/or gas and keeps your home from getting hot in the summer.
  • Use ceiling fans to help circulate the cool air.
  • Check your windows and doors to make sure they’re sealed tight. Keep your cool or warm air in the house instead of letting it outside.
  • Adjust your thermostat to keep your home 10 degrees warmer or cooler (depending on the season) when you’re not home.
  • Take shorter showers and replace your showerhead. Spending just 2 minutes less in the shower can cut your water usage by 10 gallons. And an efficient showerhead can reduce your overall usage by about 2,700 gallons per year. Look for a showerhead with a WaterSense label.

Reducing your utility spending can not only save money, but it can even help you live more comfortably. If you need more in-depth assistance with your monthly budget, consider speaking with a trained budget counselor. Counseling is free and available anytime, online, over the phone, and even in person.

Tagged in Reducing expenses, Budget tips

Emilie writes about overcoming debt, while balancing trying to eat healthy, stay fit, and have a little fun along the way. You can find more of her work at

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