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Cutting the Cost of Utilities

  • Joseph Slife Sound Mind Investing
  • 2011 20 Apr
Cutting the Cost of Utilities

In most family budgets, the biggest monthly "operational" expenses are costs for automobiles (fuel/maintenance), groceries, and utilities.

Auto expenses are the most difficult to rein in (especially with sharply rising gas prices), while grocery costs are the easiest to control (you can always eat rice and beans). Utility expenditures fall in the middle—not as flexible as grocery spending, but certainly not as inflexible as auto-related costs.

Here are several ideas for holding down your monthly utility expenses.


In many sections of the country, it won't be long before air conditioners come out of their winter hibernation. If you have a central heating and air system, now is an excellent time of year to make sure it's operating at peak efficiency — reduced efficiency translates into higher cost. Leaky ductwork, for example, can reduce efficiency up to 20%, according to the Alliance to Save Energy. An inspection by a certified technician may cost $50 to $100, but those could be dollars well spent if the inspection results in lower AC bills throughout the summer.

Depending on where you live you may be able to get an inspection at no cost. Many power companies offer efficiency inspections as part of a free or low cost "energy audit." Such audits not only check for leaky ducts, but also for leaks around windows, doors, electrical outlets, chimneys, etc. Call your power company or check its website to find out if such a service is offered in your area.

The audit may show that some caulking and weather-stripping will significantly reduce air loss. Audit recommendations will likely include adding extra insulation in the attic (a total of 12-15 inches is recommended by the Department of Energy). Cost? Expect to pay 50¢-$2 a square foot, depending on local climate and type of materials. But you can recover up to $500 by means of a 2011 federal tax credit.

Here are two other low-cost things you can do to save on heating/cooling costs. First, change your air filters regularly. Most filters used in heating and AC systems, especially older systems, are designed for only 30 days of use. After a few weeks, collected dust and dirt significantly reduce efficiency. So develop a reminder system (phone app, "task" reminder on your computer, or just an old-fashioned wall calendar with a circle around a date) that prompts you to change your filters.

Second, update your thermostat. If you have a non-programmable thermostat, you're wasting electricity. Used properly, a programmable thermostat (cost: $25-$100) can cut energy consumption at night and when you're away from home. (For recommended settings, see, a site of the U.S. Dept. of Energy.) Don't have central heat and air? Get a temperature-based programmable outlet (about $30) for use with a window AC unit or space heater.

Adding an insulating blanket to your water heater (cost: $25-$35) also can be a big money saver (more so with electric heaters but also with gas). According to the Department of Energy, unless your water heater's storage tank already has an insulation value of "R-24," adding an insulation blanket will likely save you 4%–9% in water heating costs.

More low- and no-cost ways to save on electricity are shown in the table below.

Of course, there are other strategies that will yield significant savings but are more costly on the front end, such as replacing older appliances with newer energy-efficient models.

You can find out which appliances in your house are energy hogs by buying a single-device electricity monitor ($25-$125) that provides real-time data on how much power a particular appliance (or other device) is pulling — and what that translates to in dollars and cents.

You may also want to use the monitor to learn how much "standby" power you're using—i.e., electricity consumed by devices such as printers, modems, and phone chargers even when not in use. Although these devices draw relatively little power individually, the amounts add up. According to the Lawrence Berkeley National Laboratory, devices that are constantly drawing power typically account for almost 10% of residential electricity usage. (Learn more about standby power usage at

To reduce use of standby power, invest in power strips that allow you to turn off outlets completely. Certain power strips designed for computer setups will turn off power to all peripheral devices when you shut down your computer.


Unless you have a well, the only way to save on water is to use less of it. Low-flow shower heads (cost: $10-$50) commonly reduce per-person water usage by hundreds of gallons a month. Low-flow heads take some getting used to, but remember you'll also be saving on electricity (or gas) costs, since you'll be using less hot water.

You may also want to investigate replacing your toilets. Many newer models use water more efficiently than older ones. Some even come equipped with dual flush modes, so you can choose between a less-water-intensive flush or a heavier flush.

Another way to conserve water is to fix leaks. That sounds obvious, but many people effectively wash money down the drain by putting off such simple chores as replacing a faucet washer or toilet flapper. A 50-cent washer and a $10-$15 toilet repair kit will pay for themselves almost right way, and will generate an annual "investment return" likely to outdistance any return you'll earn in the stock market.


Fierce competition in telecommunications makes this one of the easiest areas in which to cut costs. Sometimes all it takes is a phone call to a customer service rep. If you're thinking about dropping your cable or satellite TV service or changing to another company, let you current provider know. Don't be surprised if you're offered an immediate reduction in price if you'll stay on board.

As for the telephone, unless you absolutely need a "landline," you can drop it and go with a cell phone only. But what if you also get DSL Internet service through your landline phone company? In most areas of the country, you can keep the DSL service even if you drop your landline (this is known in phone company lingo as "naked DSL"). Just be aware that you may be charged a slightly higher price for stand-alone — rather than "bundled" — service.

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