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Utilities are cheap compared to the most significant monthly expenses of Americans. Still, they can hurt your budget when they fluctuate. Some can weigh you down after outliving their utility — no pun intended.
How do your bills compare to those of others? What’s the average cost of utilities for a house per month in the United States? Is there a way to save money without compromising your lifestyle? Get these interesting questions answered and more.
Utility Bill Examples
Traditional utility bill examples include electricity, natural gas, water, sewage, phone, cable, trash removal and recycling. Modern services like home security, internet and streaming fit the bill, too.
Is Netflix a Utility Bill?
Netflix is a utility bill. The same description applies to Amazon Prime Video, Hulu, Disney+, Max, Peacock and the like. Streaming services make your home functional and comfortable, so they satisfy the definition of utilities even though they belong to the entertainment industry rather than the utilities sector.
What Counts as Utilities for Taxes?
All utilities used for business purposes can be tax-deductible. If you’re a landlord and pay for them out of pocket, you can include them in your rental’s operating expenses to lower your tax liability. However, when your tenant reimburses you, you should declare them part of your income.
As a remote worker using a home office to conduct most of your business, you can use your utility bills to reduce what you owe in taxes.
However, the Internal Revenue Service requires you to calculate the business part of your utilities instead of claiming 100% of them as deductibles. Generally, you can base it on the percentage of your residence used for business.
Do Utility Bills Go on Credit?
Credit reports usually exclude utility bills because most companies don’t report payments to national credit reporting agencies. However, they typically inform Experian, TransUnion and Equifax when you’re behind. In other words, your good utility payment behavior generally goes unreported, but creditors would know your unpaid balances.
A utility company can write your account off or turn to a collection agency to recover what you still owe. Either becomes a negative item on your credit file.
Moreover, applying to receive a utility service involves a soft pull. This credit check allows a utility provider to see how good of a payer you are without affecting your credit scores.
Are Utilities Fixed or Variable?
The cost of any utilities is subject to change, but bills can be fixed or variable from month to month. Garbage collection is an excellent example of a fixed utility. Your municipality likely charges a flat rate per dwelling to haul trash regardless of how much you need the service. The same logic applies to streaming services that cost the same whether you watch content or not.
On the other hand, electricity, water, heating and sewer bills change according to use. These metered services ensure you only pay what you consume.
Average Cost of Utilities for a House per Month
The average cost of utilities for an American household is $489.35 per month. Here’s the breakdown:
- $137 for electricity
- $45.44 for water
- $66.20 for sewer
- $80.33 for gas
- $118 for cable and internet
- $42.38 for streaming
The above figure may go up when you factor in charges for phone, garbage collection, recycling and home security services. Location also determines the cost. Some utilities are more expensive in specific areas due to the supply of and demand for resources. For example, utilities in Texas are 7% more affordable than the national average because it’s the country’s energy powerhouse.
How Do You Cut Utility Costs?
Cutting utility costs requires change. Unlearn your wasteful habits and embrace sustainability to minimize consumption without sacrificing your lifestyle. Follow these tips.
Speak With an Energy Auditor
This professional can evaluate your home and offer expert advice to boost its energy efficiency. An energy audit can highlight wasteful appliances, poorly insulated areas, leaky roof boards and draft windows.
Energy auditors can work for utility companies and state and local governments. Some of them are self-employed, so you can directly hire them.
Double Down on Electrification
Swapping your gas-, oil- and propane-powered appliances for electric models can give you at least one less utility bill to worry about.
Buying new equipment and upgrading your electrical system to accommodate the additional load cost money, but your savings can offset your initial expenses over time. The more energy-efficient your home is, the faster your electrification initiative pays for itself.
You pay for utility costs because you rely on third parties to provide the services you need to sustain your lifestyle. Generating your electricity, having a septic tank, getting drinking water from free sources, and installing a security system are tried-and-true ways to decrease your utility expenses dramatically.
Mind Running Water Use
Turning on the tap for five minutes daily consumes 3,650 gallons of water yearly. You waste much of it if you leave your faucet on while brushing your teeth, washing your face, and doing the dishes by hand.
Turning off the tap when not using water can save dozens of gallons. Switching to low-flow or aerator faucets can slash your water usage in half without changing your habits.
Conserve Drinking Water
Collecting gray water from your sinks, washer, shower, and tub and reusing it to irrigate your yard, flush it, and clean your laundry can noticeably reduce your water bill. Modifying your plumbing system is necessary to capture and treat it, but it’s worth the expense.
Rethink Your Entertainment Options
How much TV do you still watch? What programming can you let go? Do you need to maintain multiple streaming subscriptions to consume your favorite content?
Rightsizing your premium entertainment options can reduce your utility expenses by tens of thousands monthly. Consider cutting the cord if you rarely watch cable. Contact your TV service provider to move you to a more affordable package containing the channels you want to keep. Cancel impractical streaming subscriptions.
Are Your Utilities Worth Their Weight in Gold?
Utilities are essential only when they’re useful. Identify the ones that meaningfully add value to your life and live more sustainably. It’s the only way to lead a lean lifestyle and decrease the average cost of your utilities for your house per month.