Setting Up Utilities for the First Time? Here’s How To Calculate the Cost

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Whether utility bills are a newer concept to you or you’re moving into a new home, it can be hard to know how much to set aside for utilities. With high inflation comes higher utility costs across the entire U.S., so it’s more important than ever to be prepared.

While setting up your new utilities is a task in itself, knowing how much it’ll cost is just as important. GOBankingRates organized this guide to help you make a budget for each utility cost, learn about additional resources get a more accurate estimate of monthly costs, and provide you with simple ways on how to lower them, as well.

How Much To Budget for Utility Costs

There are plenty of online resources that can help you plan ahead and create a budget for each utility you’ll be paying for. Move.org is a website that collects utility cost information and gives nationwide averages for U.S. utilities. Here’s what the latest data says for average monthly utility costs:

• Electricity: $117.46
• Natural gas: $61.69
• Water: $45.44
• Sewer: $66.20
• Trash: $25 – $100
• Internet: $59.99
• Phone: $114 
• Streaming services: $48.25 

Average total: $538.03 – $613.03

These averages are a good starting point, and putting aside $500 to $600 per month is a prudent budget amount. It’s important to get the details of your specific area, home and appliances before budgeting an exact amount though.

For example, If you live in a hot climate, keeping cool with fans or AC may raise your electricity costs, but your gas bill will most likely be much lower if you don’t use natural gas heating. Research more about your area and utility costs to help you get a more exact number. Move.org provides some average monthly utility cost ranges by state.

Resources To Understand Expected Utility Costs in Your Area

There are several ways to learn more about your expected utility costs and plan ahead for them. Here are some resources to consider consulting before your first bills arrive:

1. Local Real Estate Agent. Real estate agents are generally familiar with the local area and can give you a good estimate of what you’ll pay each month for major utilities. Services like electricity, natural gas and trash collection are similar in each country, and your agent might be able to let you know what most people pay with a home your size.
2. Neighbors. If you’re just moving in, consider asking a neighbor how much they spend monthly on utilities. If you do this, find a neighbor with a similar looking house to yours and ask what they pay on average. This can give you a good idea of how much your utilities may cost.
3. Utility Provider. If all else fails, simply ask your utility provider what you should expect to pay. They might be able to give you an estimate based on your address and expected usage.

It’s also important to check if there is more than one provider for a given utility. If so, one may offer a better deal than their competition.

Factors That Affect Your Utility Costs

Here are several factors that can affect the costs of your utility bills:

1. Location. Where you live can have a big impact on your utility bills. Living in a place with a mild climate can help you save a lot on electricity and natural gas bills, while living in extreme weather can increase your heating and A/C/ costs. Be sure to research the area to find any environmental factors that could affect your bills.
2. Age of Home and Appliances. In addition to simply wearing down over time, older appliances might not be as energy efficient as newer models, and can use more water or electricity to use. With an older home, you might find that drafty windows, poor insulation, poor plumbing or aged electrical systems can cause higher bills. Inspect your home and appliances to see what needs repair or replacement.
3. Using Your Appliances. In some states there are “peak hours” during the day which charge higher rates for utilities like electricity and water. In these areas, use your appliances during “off-peak” hours to help lower your bills. Things like doing laundry, using the dish washer and using the air conditioner can instead be done early in the morning or late at night.

Ways To Lower Utility Costs

While understanding your utility costs can help you make a budget for monthly expenses, it’s important to know how else to take action. Here are some ways to lower your bills and save a more each month:

1. Better Insulation. Install new insulation in your attic and other under-insulated areas in your house to help lower heating and cooling bills significantly.
2. Energy Efficient Appliances. Pick up new, energy-efficient appliances to help lower electricity and water bills, as well as possibly help you save on taxes. The Energy Efficient Home Improvement Credit can help you earn up to $1,200 per year for up to 10 years when installing energy-efficient appliances.
3. LED Light Bulbs. LED light bulbs use a lot less energy than incandescent lights, last longer and are often brighter as well. While the cost is minimal, swap out all your lights for LEDs to lower utility costs.
4. Smart Thermostat. Install a smart thermostat to help you take advantage of energy-efficient settings and programming. This can lower your bills automatically after the upgrade.
5. Low-Flow Shower Heads and Faucets. If you want to save on your water bill, install low-flow shower heads and faucets to help you maintain good water pressure and use less water.
6. Clean Your Filters. If your air handler’s filter isn’t cleaned or replaced at regular intervals, it can lower the efficiency of your HVAC systems and cost you more in utility bills. Make sure you replace them regularly.
7. Fewer Subscriptions. While it’s nice to have access to all your favorite shows and entertainment, you might be paying for subscriptions you don’t need. Stick with just a few of your favorite services can help you lower your monthly costs.

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