Here’s your utility bill for the month is NEVER followed by – Yes that’s music to my ears! Instead, bills are usually met with a very unenthusiastic response. Even more so if you’ve just moved homes because you may or may not be greeted with figures you’re used to tackling.
Managing the finances that go towards utility bills has got to be a piece of work, but it is an essential part of adulting. It keeps the household running and can’t be avoided when you’re living independently. The good news is that once you have a solid understanding of how utility bills primarily function, it’s much less of a gamble.
This is exactly why we’ve created a Utility Bills 101 guide for you. We will familiarize you with what the average American household pays for utility bills and we’d also share tips on downsizing these bills.
What Does One Deal With Under The Umbrella Term ‘Utility bills’?
Just like any 101 course begins, we would like you to take things from the beginning. So if you’ve just moved to the United States or have just started living by yourself, you’d need to get familiar with the following types of utility bills:
We’d also like to mention that the amount on these bills varies significantly based on:
- Climate: Ask yourself if you’re going to be dealing with heat like Arizona OR a typical Northeast bitter winter? Depending on climatic conditions of the state you reside in, you’d be shelling out more money to keep your house cool or warm as per your comfort levels.
- Size And Age Of Home: Have you purchased a flat in a newer apartment complex or would you be a homeowner of an old single story home? There is also going to be a difference in the amount on your bills if you’re going to upgrade from a 1 to 2 bedroom home.
- Number Of People In Your Household: Would you be able to split utility bills with roommates? Or are you the only earning member of your household?
- Individual Usage: This comes down to whether you live frugally or luxuriously? For instance, are you okay with switching to a ceiling fan when it’s warm or do you prefer to still keep the air conditioning running? You could also have personal reasons for your excess usage. Like if you work from home, then you’d most likely use much more internet than other households.
- Place Of Residence: You know for sure that you’d pay way more for gas per gallon in California than other states. Similarly, water bills and even the internet can be more expensive depending on the state you live in. For example, the rates of water in the city of Phoenix (Arizona) increased because of the depleting water supply from the Colorado river system.
Lastly, how much of your salary should ideally go into paying utilities?
A good rule of thumb is to keep aside 20% to 30% of your median household income specifically to go towards utility bills. In exceptional circumstances, you can expect more than 30% of your monthly paycheck to go towards clearing the amounts on your utility bills. For instance, if you had leaking taps and needed to get the pipe system maintained. Or even in cases where you’ve just moved and have a large amount of boxes and waste from the move, then you can expect to see a higher figure on your trash bill.
On an average, here are the ideal costs linked to different types of utility bills in the US:
- Water Bill – $17 to $71
- Gas Bill – $70 to $80
- Electricity Bill – $88 to $108
- Internet Bill – $56 to $66
- Trash Bill – $12 to $20
- Sewer Bill – $15 to $30
- Cable Bill – $80 to $100
Also Read: How Much Does The Average Water Bill Cost?
Now here’s the nationwide average that goes into paying off utility bills:
- Average total on utilities (monthly) – $338 (lower average) $475 (higher average)
- Average total on utilities (annually) – $4,056 (lower average) $5,700 (higher average)
So for example, if you are a single person and earn 30k annually, you should ideally set aside 5k to 6k (20%-30%) of your salary for your utility bills. This is around $400 to $500 per month. Like we said, it’s a good practice to ensure you’re never spending more than 30% of your income on utility bills, but things would always differ from person to person. Do note that if you’re super stingy with how much water, energy, internet or electricity you consume, then the above mentioned estimated amounts can dip even lower.
The Breakdown Of Each Utility Bill in America
Primary Utility Bills
1. Water Bill
Knowing how much water your household consumes is much more complicated than keeping track of the litres you drink in a day. If you have difficulty with that too, here’s a reminder to drink some water. It can be difficult to respond to how much water you use for washing, cleaning, cooking and so on. Your bill comes to you and you’re unsure about how much gallons you’ve used and whether that amount on it is right. So, let’s dive into your water bill structure to get a better understanding of things.
How Is Your Water Bill Calculated?
- Fixed Flat Fee
In some cases, all residents pay a fixed flat fee for water. This does not depend on usage. It’s almost like going out for lunch with friends and not eating anything heavy, but still going dutch when the bill arrives. When there’s a fixed fee that everyone pays, this means your house won’t have a meter to read your usage.
- Metered Service
Another popular method by which your water bill amount is calculated is by charging you per gallon of water used. But this is the confusing part, since water usage is calculated based on Centum Cubic Feet (CCF) and 1 CCF is 748 gallons. But an average American would only use roughly 80 to 100 gallons per day per person.
So suppose your monthly water bill tells you that you’ve used 6 CCF of water, to know the exact gallons used, you would need to multiply that into 748. You’d then get to know that your household consumed 4,488 gallons of water in that month. When your water bill follows the metered structure, you’d have a clear understanding of your CCF number. Depending on if your CCF reads 6 or 10, you would see a variation in the bill amount. Knowing your CCF number is important to know the gallons of water you use.
- Block Rate Scheme
A block rate scheme is where you pay a low rate for consuming less CCF and higher rates if the volume of your consumption keeps increasing. To give you an example, if your CCF usually reads 16, but you managed to bring it down to 12, then you get to take advantage of unit prices of the 12 CCF group, which would be drastically lower. In short, you’re trying to be an efficient user so you’re getting rewarded some levy on costs.
Do note that these are just a few of the top strategies in place by water suppliers to make billing structures simple. Let’s now get an understanding of what costs should look like.
What Does The Average Water Bill Cost Look Like?
The figure you pay for a gallon of water hugely depends on where you live. Just like no two faces look the same, it’s very rare for two state water bills to be the same.
For instance, here’s the difference between average water bills in different states:
- Average water bill in Arizona – $41
- Average water bill in California – $65
- Average water bill in Florida – $50
- Average water bill in New York – $40
However, the national average for water bills in the USA is at $71.
What Does The Average Water Consumption In The US Look Like?
Now that you’re up to speed with ways in which the water bill figure is calculated and costs, let’s remind ourselves of usage. The average american consumes roughly 80 to 100 gallons a day. For instance, your 10 minutes shower could be 50 gallons, a load of laundry could be 40 gallons and if you use an older toilet, then you’re flushing 3-4 gallons of water per flush. So, if you live in a big house and have an even bigger family, the gallons can be way beyond 100 per day.
What Can You Do To Save On Water Bill Costs?
- Take shorter showers.
- Install a low pressure shower head.
- Turn the tap off while brushing your teeth.
- Test toilet for leaks by putting drops of food dye in the tank. If the food color reaches the toilet bowl, it’s a sign of a leak.
- Inspect pipes for leaks, take a note of your meter reading and then go without using any water for 2 to 3 hours and check the reading again to make sure there’s no undetected leak.
- Get an aerator for faucets.
- Ask owners for their previous water bills to gauge on costs.
2. Gas Bill
Natural gas is an efficient way to run your gas ranges, grills, water heaters, and other heat appliances, all at the flick of a switch. Most homes consume a large amount of natural gas for heating rooms or the water. Your usage could be more if you live in places with harsh winters. It’s also the power that helps keep the kitchen up and running. There’s no doubt that this is a primary source of energy that most houses consume, so let’s understand how these gas bills function.
How Is Your Gas Bill Calculated?
There are several ways in which a gas utility company can bill you for usage of natural gas. In certain cities, you have a fixed charge for a certain volumne of natural gas consumed, there’s no discrimination and everyone pays a flat fee for that volumne. There’s also other types of gas bills where there’s a direct usage to cost relationship maintained by the gas company. This is a great alternative to the fixed rate service, since you just pay exactly for what you use.
Fixed rate bills are easy and there’s no worry of big bills and then small bills. But when you choose a usage to cost billing plan, things are a bit more complex. This is mainly because there are several variables set by the utility company to determine the volume your household used to charge you.
Overall, your household gas usage can be measured via – CCF (100 cubic feet) or MCF (1000 cubic feet) or BTU (British Thermal units). These are 3 ways to measure gas use and we recommend checking your gas bill to see the price you’re paying per unit of gas. But don’t spend too much time expecting the exact same figure to show up from month to month, since gas prices keep changing globally. Instead, we suggest getting to know the tiered system of billing. Tiered pricing is when the rates paid for a certain volume of gas starts to kick off dramatically once it’s crossed a line set by the utility company.
What Does The Average Gas Bill Cost Look Like?
Now that you have a fair idea of the story behind the structure of your gas bill, let’s understand the average costs of gas bills in different states:
- Average gas bill in Arizona – $82
- Average gas bill in California – $34
- Average gas bill in Florida – $105
- Average gas bill in New York – $102
However, the national average for gas bills in the USA is between $70 to $80.
What Does The Average Gas Consumption In The US Look Like?
An average American household uses approximately 168 cubic feet of natural gas on a daily basis. It could be more or less depending on whether you use natural gas just for heating water for bath or even need to use it to heat the pool water. You may use 40 therms or so a month if you have winters in the region you live. Natural gas can be savior if you live in a cold region, because electric heating can be way more expensive.
What Can You Do To Save On Gas Bill Costs:
- Regular maintenance of your appliances
- Use thick curtain to insulate your home
- Set up a smart thermostat
- Check heater’s filter for any dirt or dust
3. Electricity Bill
At times, electricity bills can have some scary figures on them which could be as frightening as the dark. Most of the appliances in our houses run on electricity. If there’s a power failure, the atmosphere can drastically change. So, let’s look at the functioning of the third primary utility bill – Electricity!
How Is Your Electricity Bill Calculated?
Just like your water and gas bill, you have different types of electricity bills and schemes to choose from. This would entirely depend on where you reside and the available plans at the utility company in your area. But one common aspect that all electricity bills share is that you pay for how much you use. It is as simple as that.
The Electricity you use is measured in kilowatt hours (kWh). When you receive your bill, it is advisable to jot down the ‘kWh’ used on a daily and monthly basis. Once you’ve nailed your average usage, you can find ways to get a better plan for yourself.
If you can say with confidence that your monthly usage is around 650 kWh a month, you get an upperhand of taking advantage of offers. For example, let’s assume that there’s a billing structure getting you a good price value for using 600 kWh, and as you hit 601 kWh, the prices are built differently. Then, you can make efforts to reduce usage to bring down the costs of your bill. We suggest diving deeper into your bill by dividing the amount you pay per month, into the kWh used to crack the case of how much you’re charged.
What Does The Average Electricity Bill Cost Look Like?
Like we mentioned earlier, a simple division of paid amount by total kWh will let you know how much you’re being charged.
For example, a simple division of paid amount ($109) by usage (870 kWh) will give you an answer of how much you’re paying for each kWh. In this example it’s $0.12 a month for one kWh. This is also what the average american pays for electricity. Overall, 12 to 13 cents per kWh is a good rate to be paying, but there will be exceptions if you live in cities where this average doesn’t apply. Presently, Hawaii sees the most expensive electricity bills in the nation, where the average is between 29 to 33 cents per kWh.
- Average electricity bill in Arizona – $128
- Average electricity bill in California – $101
- Average electricity bill in Florida – $126
- Average electricity bill in New York – $150
The national average for electricity bills in the USA is at $88 to $108 per month.
What Does The Average Electricity Consumption In The US Look Like?
On an average, american households consume an average of 877 kWh per month which is approximately 10,649 kWh of electricity annually. To give you a holistic view of which appliances in your house contribute to making it an average total of 877 kWh getting consumed a month, see below:
- Dryer – average 75 kWh/ month
- Refrigerator – average 205 kWh/month
- Dishwasher – average 30 kWh/month
- Washing machine – average 9 kWh/month
- Lighting – average 50 kWh/month
- Television – average 27kWh/month
What Can You Do To Save On Electricity Bill Costs?
- Unplug electronics that are not in use.
- Choose a laptop over a desktop as it consumes less energy.
- Use fans as an alternative to AC.
- Install LED lights.
- Electricity can cost more during peak hours, so try to avoid using the laundry, shower or do dishes during this time. Ask your utility company about peak hours.
Secondary Utility Bills
1. Internet Bill
When it comes to understanding your internet bill, the 2 main questions that you should be asking yourself are:
1) Do you have a need for a speedy internet? If yes, approximately how much?
2) What are your options of providers in the area you live?
If you have accurate answers for both these questions, then half the battle with this bill can be considered won. But just so that we have all bases covered, let’s get into details of the internet bill which is a utility that’s like coffee (most of us can’t really function without it).
How is your internet bill calculated?
Like we just mentioned, your bill is calculated based on the speed you require and the amount of internet you consume. If you work from home and need a fast internet connection, then your bill is invariably going to be higher than households that don’t.
Although, the most simplified way of understanding the bill is that the more the Mbps you use, the more money you shell out. The term ‘Mbps’ is simply the measurement used to calculate the speed of the internet you’re using. Another factor that has a direct impact on your internet bill is the plan you select. There are premium plans and different types of connections out there. The most popular connections are:
- Fiber (ultra fast internet)
- DSL (inexpensive)
- Cable (most commonly available)
- Satellite (needs dish installation)
These are the main types of fast internet connection and each vary in price. So, when you glance at your internet bill, observe the Mbps and connection type you’re using. For a conversation on schemes and offers, you would have to get in touch with the internet service provider (ISP) in your locality.
You would solely have to depend on your ISP for reliable connection that is not too harsh on your wallet. We suggest asking your neighbors or people who previously lived in your flat to point you in the right direction when it comes to selecting a provider. But before meeting a provider, ensure you have a rough idea of the GB of internet you’d need.
What does the average internet bill costs look like?
On an average, households use 100 Mbps speed internet that costs roughly $50 per month. If you’re using an internet connection with 50 Mbps or anything lesser than 100 Mbps, you can expect your bill to be lower than the national average of $50/month. Here is a gist of what internet bills look like in few distinct states:
- Average internet bill in Arizona – $74
- Average internet bill in California – $66
- Average internet bill in Florida – $53
- Average internet bill in New York – $58
The national average for internet bills in the USA is at $56 to $66 per month.
What Does The Average Internet Consumption In The US Look Like?
The median usage of the internet per household is somewhere between 250 GB to 300 GB. But then again, it could be way less or more, depending on if you’re using the internet just to browse and check emails. Or is it way more than that?
In today’s day and age, it is most likely going to be more than that. You may use your internet for streaming your favorite shows, video calling, social media, gaming or even playing some music.
The only way to take control over the usage is to understand the number of devices in your house that only run on the internet and the number of members who need fast internet. If you have multiple people using 100 Mbps speed internet, don’t be surprised if you find that you’re using triple the average data households consume. As an exercise, just look at your phone and see the GB of data you consumed today itself and you’ll know.
What Can You Do To Save On Internet Bill Costs:
- Shop around and ask neighbors for suggestions if you’re new to the area.
- Combine your TV and internet bill to reduce costs.
- Look for offers and take advantage of limited time deals.
2. Cable Bill
Did you know that there’s actually a term used to describe people who are moving away from cable? Yes, there’s a new trend called ‘cord cutting’, which basically means that it’s time to cut all the traditional ties one had with cable.
It’s easy to find cord cutters in today’s era when you have choices like Apple TV, Amazon, Hulu, Netflix and other subscription services. Interestingly, there’s also a term ‘cord-nevers’ for people who have never used cable in their lifetime! But if you’re that rare person out there who still uses cable, keep reading to know how your bill gets calculated.
How Is Your Cable Bill Calculated?
Cable bills are the most simple ones to understand. You pay a fee for a month or year and get a set number of channels. There’s also other plans where you could selectively choose channels you personally enjoy and pay for only those you watch. There are different types of bundles and offers out there when it comes to using a cable service. That’s all there is to a cable bill.
What Does The Average Cable Bill Costs Look Like?
Most TV providers would cut you a deal between $80 to $100 for cable. The bill doesn’t depend on usage, but once you’ve paid the amount, you get limitless time to view channels you enjoy. With the exception that you may have to pay special costs for premium channels.
What Does The Average Cable Consumption In The US Look Like?
3 to 4 hours is what the average american TV consumption stands at. It might be a different scenario from door to door. If it’s less than an hour or so a day, it is necessary to ask yourself whether it is worth paying for cable. A high majority of people are axing cable from their lives because of the multiple streaming services out there.
What Can You Do To Save On Cable Bill Costs?
- Re-evaluate the premium channels that are part of the package and see if you can cut down on any channels.
- Combine your cable and internet bill and ask for a better deal on the same.
- Compromise on channels and customize the plan so that you’re not over-paying.
- Pay special attention to the fine print behind special offers, negotiate with your TV service provider to reinstate the rates they show online.
3. Sewage Bill
Sewage is the fee you pay for the wastewater to get treated, maintained and properly disposed of. In other words, you’re paying a fee for all the water that goes down the drain. For instance, the water used for flushes, doing dishes, bathing, laundry, cleaning, maintaining plants, pool water and so on.
How Is Your Sewage Bill Calculated?
The amount you pay for your sewage bill goes towards the proper management of the wastewater from each household in the area you live. The amount also goes towards different operations such construction projects, maintenance, hygiene, treatment of the water, sustainable development projects and so on.
Depending on the number of operations taken up for sewage maintenance and management in your area, the more the bill could be. If there’s an influx in population in a certain county, there could be more pipes and systems that need to be fixed and installed. That’s when the community would need to plug into paying more construction costs on their sewer bill.
Apart from pitching in amounts for maintenance, your sewage bill is calculated based on the water you use. So that’s why it is usually tied with your water bill. You’re paying for 95% of the water your household consumed.
What Does The Average Sewage Bill Costs Look Like?
The average sewage bill in the US is bundled with your water bill. But if you just take the sewage bill by itself, you can expect to pay $15 to $30 for sewage maintenance.
What Can You Do To Save On Sewage Bill Costs?
Your water usage and sewage bill are joined at the hip. Inevitably, the tricks used to save water also apply to save costs on your sewage bill. It’s best to fix all the culprits that lead you to waste water. Some of the root causes of water wastage are leaky taps, taking long showers and not fixing the toilet flapper.
4. Trash Bill
Trash bills are one among the many other things one has to pay for when adulting. From taking the trash out to growing up and also paying for trash to be taken is something one learns in time. So, let’s understand the story behind the structure of your trash bill.
How Is Your Trash Bill Calculated?
The money you pay for your trash bill goes towards the maintenance of the disposal operations and many other projects that the waste management department handles. You either pay the bill on a monthly basis or you get an amount that’s based on the garbage you’re disposing of. If you’ve just disposed of a ton of packing boxes, then you’re automatically going to be charged higher than you normally would on a monthly basis.
What Does The Average Trash Bill Cost Look Like?
The average American pays $12 to $20 a month to dispose of trash from their households. The trash bill is unsurprisingly the smallest price to pay amongst the other utility bills.
What Does The Average Trash Consumption In The US Look Like?
On an average, we create roughly 4.9 pounds of trash per day. We’ve used the words “create trash” to denote that to a large extent, we have lots of control over it. The global average for trash is at 1.6 pounds per day. So, this definitely speaks for itself about how the gap can be reduced.
What Can You Do To Save On Trash Bill Costs?
- Become more mindful about the trash created at your household.
- Find sustainable ways to reduce the amount of trash by following practices of composting and avoid single use plastic.
- Think twice before making a purchase.
By understanding how utility bills function, we become more aware of the immense carbon footprint our houses hold at the moment. Observing your utility bills brings to light issues in consumption habits of our households vs the nationwide average. Once you’re more mindful of that, you can automatically find smarter ways to curb usage. And we bet, this would specifically come handy when you’re dealing with new bills in a new city.