Utilities help to keep your daily life comfortable and your home operable. So, what is considered a utility bill? And, what is the average cost of your monthly utility bill? In this guide we’ll break down what types of essential services make up your utility bills, how to read your bill, and strategies for reducing different utility bills.
By Jordan Watts
Homeownership isn’t all fancy new kitchen appliances and open floor plans– it also comes with a lot of monthly bills. After your mortgage payment is set, you’re still left with a pile of utility bills that can quickly eat up your monthly budget. Don’t fret though! Utilities help to keep your daily life comfortable and your home operable.
So, what is considered a utility bill? And, what is the average cost of your monthly utility bill? In this guide we’ll break down what types of essential services make up your utility bills, how to read your bill, and strategies for reducing different utility bills. On average, utility expenses make up 8 to 10% of a typical home budget – or around $380 a month, depending on what you count as a utility.
A utility bill is a monthly statement that outlines the cost for essential services like electricity, water, and gas. Utilities are basic services that are necessary to keep your home in working condition for daily life. Some folks also add waste management or sewage bills, trash pickup, and internet bills to their list of utilities.
It’s up to you to define what’s considered a utility bill, but a good rule of thumb is that these should be essential services. Other bills, including streaming services or phone bills, are typically accounted for in other budget categories.
A utility bill lists the customer’s name, address, and account number. It will also have your amount owed and due date clearly listed to help you avoid risking late fees. Normally you can pay utility bills by mail or through an online portal.
Your utility bill will also provide clear information on how much you used each service throughout the billing period. For example, your electric bill will list your energy usage in kWh. Many utility bills also show how your usage has varied over the past several months.
The average cost of each utility can vary depending on your utility provider, location, the number of people in your home, and usage amount. To help provide more insight into utility bills and their average costs, we’ve broken down three main types of utility bills.
In 2024, the average electric bill was about $148 per month for Americans, according to the Energy Information Administration. However, this number varies greatly based on which state you’re located in and if you live in a deregulated energy market.
If you’re looking to save money on your electric bill, you’ll need to focus on being more energy efficient and reducing overall energy consumption. Small adjustments to your daily life can make a big difference when it comes time for your monthly bills.
Consider investing in a programmable or “smart” thermostat that can automatically adjust temperatures based on when you’re home or away. Additionally, consider changing your thermostat by 7-10 degrees (depending on the season) while you sleep– this can save you up to 10% on your electricity bill over the course of a year.
Schedule an annual home energy audit to make sure that your HVAC system is functioning properly, energy efficient appliances are installed when possible, and that there aren’t any air leaks driving up energy costs during the winter months. You can even conduct a DIY home audit if you’re on a budget.
Pro Tip: If you live in a deregulated energy market you can shop for the best energy plans and electricity providers in your area. This can often help you save money by reducing energy costs at the source.
According to the U.S. Environmental Protection Agency, the average family spends more than $1,000 per year on water costs. This means the average monthly water bill is around $83.
To lower your water bill your first move is to check for any leaks in the faucets, showerheads, sinks, and toilet valves. Fixing these can make a huge impact on your monthly bill. You can also invest in energy efficient appliances like dishwashers and low-flow showerheads to improve your efficiency.
However, it’s important to remember that habits in your daily life can also make a huge impact on your water consumption. Consider taking shorter showers and turning off the sink while you brush your teeth. Additionally, make sure that you’re running the dishwasher and full loads of laundry only to reduce water usage.
According to the Energy Information Administration, the average family spent about $80 a month on gas bills. This means folks were just shy of $1,000 a year on natural gas.
However, that amount also varies depending on where you live as the retail price is determined by your location and service provider. If you have a larger home or gas-powered appliances, such as furnaces, water heaters, and stoves, you’ll also have a higher gas bill.
Pro-Tip: In some states, and with some service providers, you may see your electricity and gas bills combined as one bill. This is because both utility bills deal with your overall energy consumption.
Considering that most of your gas bill probably goes toward heating the house, you can save money by keeping a close eye on your thermostat. Plus, just like with electricity, you can save on your natural gas bill by lowering temperatures while you’re away or asleep in the winter months.
As we mentioned previously, it’s up to you to determine what types of services are considered utilities in your home. The more services you consider utility bills though, the greater a portion of your household budget they’ll inevitably take up. Consider tracking your monthly utility costs along with other expenses to understand your total bill.
Pro Tip: If the wide variability of utilities creates stress for your monthly budget, it might be time to look into budget billing. Your utility company will take your average usage from the previous year and bill you this amount each month, helping to stabilize your bill against fluctuating costs.
If you don’t pay your utility bills, you’re risking late fees, damaged credit, and the possibility of your utility company turning off service. But don’t panic! There are programs in place to help.
Start by calling the customer service line of your utility provider. You can typically find this phone number on your last bill or online along with other basic information. Explain your situation and request help, many service providers will work with you to avoid turning off utilities.
You can also call 211 or visit 211.org. This is a network of experts run by United Way that can help connect you to local resources and assistance.
Many government websites are also available to help, including your state’s Low Income Home Energy Assistance Program. This federal program helps eligible households struggling with energy costs to maintain properly functioning utilities and improve energy efficiency.
If you’re looking to save money on utilities, it’s important to periodically shop around for the cheapest plans and providers. EnergyBot can help you get started by finding the best energy plans in your area in minutes.
