Are You Average? Here’s What The Typical U.S. Household Spends On Utility Bills Each Year
Whether you're buying a home or renting an apartment, don't forget to include the cost of your utility bills in your monthly budget. These bills (which cover your home's heating and cooling, water, electricity and gas, trash and recycling pick-up, landline phone and Internet and cable service) aren’t inexpensive. And if you don't account for them when drafting your household budget, you might be surprised at how much these utilities drain from your bank account.
The amount you spend on your utilities each month depends on several factors including where you live, how large your home is and how committed you are to taking the steps necessary to reduce the amount of energy your residence consumes.
As for how much you can expect to spend, though? A typical household in the United States spends more than $2,000 a year on utility bills according to the federal government's ENERGY STAR® program. That’s more than $167 a month.
Here's a closer look at how much homeowners and renters spend on the various utilities that power their homes as well as some advice on how to reduce the dollars you shell out each month.
Average Monthly Water Bill In The United States
How much can you expect to pay for your home's water? That depends on where you live, the size of your home and the ways in which you use water. If you love long showers in the morning, your water bill will increase. If you take shorter showers, your bill will fall.
Of course, you use water on a daily basis. And the Environmental Protection Agency (EPA) says American households use quite a bit of it. According to the EPA, the average U.S. household uses about 88 gallons a day of water for every person. This means a family of four would use about 10,500 gallons of water in a typical 30-day stretch.
The nonprofit organization Circle of Blue says it could cost you more than $50 a month to pay for water depending on where you live. Again, though, this depends both on where you live and how much water your entire household consumes each year.
For example, a family of four using 50 gallons of water for every person each day spent an average of $35.49 a month on their water bill in 2018. Last year that figure rose to an average of $70.39 a month for a household of four with every person using an average of 100 gallons of water each day.
And four-person households in which each person consumes an average of 150 gallons of water daily? Circle of Blue says such households spent an average of $112.04 a month.
Even if you take steps to conserve the amount of water you’re using, you still might spend more than you'd like depending on where you live. In some cities, water just costs more.
For example, according to Circle of Blue the average water bill for a Baltimore family of four using 400 gallons total per day was $59.39 a month in 2018. In Chicago, the average figure for the same family came in at $46.56 a month while in Seattle it was a far higher $104.53.
If you rent out an apartment, make sure you remember the cost of water might be included in your monthly rent. In other words, you wouldn’t have to pay a separate bill for this fee.
Average Monthly Electric Bill In The United States
Your electric bill is like your water bill: How much you’re charged each month will depend on where you live, how big your home is and whether you leave the lights on all day or flip those switches as you move from room to room.
That said, the U.S. Energy Information Administration said that the average electric bill for U.S. households came in at $111.67 per month in 2017.
Again, though, how much you pay can vary depending on where you live. In Hawaii, for example, the Administration said that the average monthly electric bill came in at a far higher $149.33 in 2017. However, that figure came in at $79.16 a month in New Mexico.
Average Monthly Electric Bill By State
How average are you when it comes to the amount you pay for electricity each month? A good way to determine this is to study how your average monthly electric bill compares to other consumers in your state.
Here’s a look at the average 2017 monthly electric bill in every state courtesy of the U.S. Energy Information Administration.
District of Columbia: $96.52
New Hampshire: $114.95
New Jersey: $102.38
New Mexico: $79.16
New York: $103.22
North Carolina: $113.98
North Dakota: $109.38
Rhode Island: $105.76
South Carolina: $140.80
South Dakota: $115.06
West Virginia: $119.30
(Source: U.S. Energy Information Administration)
Average Natural Gas Cost In The United States
Wondering how much you'll spend in natural gas costs when you move into a new home? Figuring this out can be tricky. That's because there are so many variables that can impact your gas bill.
For example, your gas bill will be higher if your home's furnace, water heater, oven, stove and dryer is powered by gas. If your home's appliances are instead powered mostly by electricity, your monthly gas bill will drop.
It also matters where you live, and not just because of the size of your home. Your area's climate plays a major role in the size of your monthly gas bills. Heating a home accounts for the greatest consumption of natural gas. If you live in a cold climate where the winter months see frigid temperatures, you'll probably spend more on natural gas than someone in a milder climate.
Then there's the size of your home. As you can guess, it takes far more gas to heat a larger home. Consequently, you'll pay more each month in natural gas if you own a big home.
You can impact how much gas your home consumes each month by boosting the energy efficiency of your home. Adding more insulation to your home's walls, for instance, will keep the hot air in your residence for a longer amount of time. Multi-pane windows will do the same. Investing in furnaces and water heaters that are more efficient will also help reduce your monthly gas bills.
So, how much can you expect to pay each month in natural gas to heat your home and power your gas-fueled appliances? The American Gas Association most recently said that households in the United States spent an average of $661 a year in natural gas to heat and fuel their homes. That comes out to a bit more than $55 a month.
Remember again that natural gas might be included in your monthly rent if you live in an apartment.
Average Natural Gas Prices By State
Knowing what households pay for natural gas for the United States as a whole doesn’t help much if you’re trying to compare your gas consumption and spending to your neighbors.
What can help is a list of what the average household spends annually on natural gas in each state. Fortunately, the American Gas Association broke down these numbers for 2017. As you might expect, residents in states with colder climates tend to spend more each year.
District of Columbia: $814
New Hampshire: $1,010
New Jersey: $727
New Mexico: $471
New York: $1,012
North Carolina: $634
North Dakota: $581
Rhode Island: $1,070
South Carolina: $549
South Dakota: $529
West Virginia: $628
(Source: American Gas Association)
What Does It Cost To Get Online, Watch Cable TV Or Make A Phone Call?
When you think of utilities, what springs to mind? Water, gas and electricity, right?
Sure. But “utilities” is the general term used for any service that keeps a building (a home, office, school, hospital, warehouse, distribution center or any other building) running. This means your phone service, Internet connection, cable TV service and garbage and recycling pick-ups are all utilities too. When estimating how much you’ll spend on utilities each month, you need to also consider these additional costs.
Consider cable or pay TV. Leichtman Research Group reported in October 2018 that about 78% of U.S. households with a TV subscribe to some form of pay TV service. That's a high number, but it's actually down from 86% in 2013 and 87% in 2008. Leichtman reported that subscribers spent an average of about $107 a month on pay TV services. That's a slight jump of 1% from a year earlier.
Want to connect to the Internet from home? That’ll cost you too. In December 2018 Leichtman reported that 83% of U.S. households had Internet service at home, up from 76% in 2008. The vast majority of households use a broadband connection, with Leichtman reporting that 98% of households with Internet service rely on this type of connection.
How much are households paying for this service? In 2018 personal finance site CreditDonkey said the average Internet bill in the United States was $66.17 a month.
How Big Of A Financial Impact Does The Cost Of Utilities Have On Consumers?
Paying for utilities is a fact of life. You can't run your home without them. And unfortunately when you add up the cost of all utilities, these key services can eat up a good chunk of your annual income.
The American Coalition for Clean Coal Energy said that consumers spent 7% of their annual incomes on energy costs in 2016. Paying for utilities is more of a burden, of course, on consumers with lower incomes. According to the Coalition, households earning the lowest incomes spent 22% of their after-tax income on residential utilities and gasoline. Households in the top income bracket, though, spent just 5% of their annual incomes on these costs.
The Coalition also points out that the cost of utilities isn’t decreasing. It’s instead heading in the opposite direction. The Coalition reported that national average electricity prices have increased by 33% from 2005 to 2016. In fact, electric bills are typically the largest utility cost that homeowners face each month.
Total Costs Of Utilities By State
When you add up all the utilities that serve your home (everything from water to electricity, cable and Internet), how much can you expect to pay each month?
In 2018, Move.org studied every state and determined how much consumers in each one paid every month on average for utilities.
Here's a look at the results:
New Hampshire: $477.02
New Jersey: $432.72
New Mexico: $392.12
New York: $477.31
North Carolina: $417.91
North Dakota: $411.95
Rhode Island: $521.98
South Carolina: $473.78
South Dakota: $382.57
West Virginia: $393.39
The Most Expensive And Least Expensive States For Utilities
Along with the above list, Move.org put together a list of the 10 states in which the combined cost of utilities were the highest as well as one for the 10 states where they were the most affordable.
Here were the 10 states in which utility costs were the highest each month:
- Hawaii: The big culprits in Hawaii are electricity and natural gas, both of which rank as the most expensive in the United States. Electricity costs an average of $300.04 a month while natural gas costs $232.20. That helps account for Hawaii's high $730.86 average utility cost each month.
- Alaska: Move.org said that Alaska residents paid more for Internet service in 2018 than the residents of any other state, an average of $107.43 a month. It's partly why the total monthly cost of utilities here ranked so high.
- Rhode Island: Natural gas and Internet costs rank high in Rhode Island; fourth and second in the nation respectively. This is why Rhode Island residents pay so much each month for utilities.
- Connecticut: Why does Connecticut rank fourth in total average monthly utility costs in Move.org's study? Part of the reason are its natural gas costs. It costs an average of $114.11 each month here. That's higher than in most states. And Connecticut's average $187.29 electricity bill is high too, ranking third highest in the country.
- New York: New York residents pay an average of $173.84 a month in electric costs. This helps explain why the state's average monthly utility costs rank so high.
- New Hampshire: Electricity and natural gas costs are higher than average in New Hampshire at $169.35 and $107.67 respectively.
- South Carolina: South Carolina residents pay a lot for natural gas, an average of $150.03 a month according to Move.org.
- Massachusetts: The electric bills are high in Massachusetts too, ranking fourth in the country at an average of $185.05 per month.
- Vermont: Vermont residents face higher-than-average monthly electricity and natural gas bills at $160.20 and $110.43. That combination puts this state in ninth place on this list.
- Maine: Maine brings up the rear of the states in which utilities cost the most. Maine residents who are wondering why they’re in tenth place merely have to look to their natural gas and electricity bills, which are $146.30 and $132.04 on average according to Move.org.
If you’re looking for smaller monthly bills, consider moving to one of these 10 states. Move.org ranks them as the states with the smallest average monthly utility bills.
- Idaho: The Gem State is the place to live if you're interested in paying the least for utilities. According to Move.org's list, natural gas is particularly cheap here, averaging $52.89 a month in 2018. Electricity is pretty cheap too, costing an average of just $93.82 a month (the fifth cheapest in the country).
- Utah: Utilities are cheap in Utah too. There, electricity, natural gas and Internet service all rank below average. Natural gas costs are the second most affordable in the country at $52.33 a month, according to Move.org.
- Montana: Montana ranks as the third cheapest state for utility costs thanks to natural gas costing just $52.12 a month on average in 2018, the single most affordable rate in the country.
- Washington: Move.org says that Internet costs in Washington are expensive. But ultra-cheap electricity and natural gas costs make up for that, earning Washington the title as fourth-cheapest state for utility costs.
- Nevada: Affordable natural gas costs are again a main factor for Nevada, which ranks as the fifth most affordable state in America for utility costs. Electricity is pretty inexpensive here as well, coming in at just $101.71 per month on average in 2018.
- Louisiana: Louisiana claimed the smallest average monthly electric bill in 2018, $86.83. Mostly because of this, the state ranked as the sixth most affordable when it came to monthly utility bills in 2018.
- Oregon: Residents of Oregon are fortunate to pay below-average monthly fees for both electricity and natural gas. Thanks to this, the state has one of the lowest monthly utility costs in the country.
- South Dakota: While their electricity costs aren’t particularly low, residents of South Dakota don't pay as much for Internet service or natural gas as most of their peers across the country.
- Arkansas: The average monthly electric bill in Arkansas is the one of the lowest in the country, ranking in 48thplace at $89.52. The state's average Internet bill at $51.04 a month also ranked as 48thin the United States. That certainly helps explain how Arkansas made this list.
- Wisconsin: Monthly electric bills were among the highest in Wisconsin in 2018, but both Internet access and natural gas costs were far below the national average. That combination outweighed the high electric costs and helped Wisconsin rank as one of the most affordable states in terms of monthly utility bills.
The Size Of Your Home Matters Too
You’ll pay more for electricity and gas if your home is larger. It takes more energy to heat and cool a bigger home than a smaller one.
This hasn’t stopped people from buying large homes, though. According to the latest research, buyers are still interested in homes that come with plenty of square footage even if it does cost more to heat, cool and power.
According to “2018 Profile of Home Buyers and Sellers” from the National Association of REALTORS®, buyers purchased homes that averaged 1,900 square feet in size. These homes had an average of three bedrooms and two bathrooms.
But while buyers have been purchasing sizable homes, they’re also concerned about the price of heating and cooling these larger residences. The profile of buyers and sellers said that 84% of buyers found heating and cooling costs to be at least somewhat important.
How To Reduce Your Utility Bill
Say you don't want to move to a state in which utility bills cost less. Here's some good news: It's possible to reduce the money you spend on electricity, water and gas simply by changing your habits or investing in energy-efficient appliances and insulation.
Work that thermostat: Want to lower your heating and cooling bills? Concentrate on your thermostat. In the winter, keep your home colder when you're not in the house and only boost the temperature when you return. In the summer, raise the temperature in your home when you're out. There's no need to blast the heat or air conditioning if you're not around to enjoy it.
Check your windows and doors: Drafty windows and doors cause your home's heating and cooling systems to work harder. That increases your monthly utility bills. Replace windows that leak air with more efficient models. Do the same with your doors to keep the cold and hot air inside your home.
Take shorter showers: You can dramatically cut the amount of water you consume each month and lower your water bill by taking shorter showers. Reducing your shower time by as little as 5 minutes a day can make a dramatic impact.
Invest in a more efficient showerhead: New showerheads, even efficient ones, aren't overly expensive. By investing in a showerhead that uses less water you can further reduce your monthly water bills by a significant amount.
Don't use hot water in your washing machine: You'd be surprised at how much more energy your washing machine will use when you wash your clothes in hot water. To save on energy usage, wash your clothes in cold or warm water instead.
Fix faucets that leak: A leaky faucet is annoying, but it's also expensive. All that dripping adds up to a lot of wasted water by the end of the month. Fix your drippy faucets and watch your water bill dip.
Invest in energy-efficient appliances: It might be expensive to replace older appliances with energy-efficient models, but these newer models consume far less energy. Spending your money on a more efficient refrigerator, dishwasher, furnace or air conditioning unit can end up leaving you with far lower bills each month.
Invest in new light bulbs: Newer light bulbs of the fluorescent or LED variety consume far less energy than your typical light bulb. Make the investment in these new bulbs, replace your older versions and you can make a serious dent in your monthly energy bills.
There are many ways you can reduce your utility costs even if you don’t want to move to a different state. Consider all the ways you can reduce your future utility bills, and not only will you save money but you’ll also help save the environment.
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