Everyone benefits from energy-efficient living. On the small scale, you save cash on those monthly bills and electricity charges (hello, vacation fund!). And on a larger scale, you reduce your environmental footprint and the emissions put out into the world. It’s a win-win all around.

It’s not hard either. With a few small changes around the house, you can cut down on your household’s energy output, as well as your monthly expenditures. The guide will show you how.

Average costs of utilities

Americans spend a lot on energy. When you combine electricity, gas, water, and more, the average consumer spends about 7% of their annual income on energy — and that doesn’t even include the costs for other utilities like trash pick-up, cable, and internet. Throw in those added expenses, and most people spend around $422 per month on utilities or more.

In short, there’s a lot of room for improvement.

That’s especially true in states where energy costs run the highest. Click on the map below to find out the average cost of utilities in your state.

Fortunately, residents in states with the highest utility costs (or any, for that matter), don’t have to suffer the sky-high charges in silence. There are several steps that can help lower these costs and lighten the monthly load.

How to save on your energy bill

Your energy provider powers most of the systems in your home — your air conditioning and heating units, your electricity, your lighting, and the majority of your appliances and electronics. If you’re like most people, it’s the biggest bill you’ll have each month.

Heating and Cooling

HVAC costs account for a large portion of your energy bill, especially in the summer and winter seasons, when demand for these services is highest. Fortunately, there are ways to reduce these costs and increase the overall efficiency of your home’s heating and cooling systems.

Here’s how:

  • Seal up leaks around windows, doors, and air ducts – It’s estimated that air leakage costs Americans anywhere from $200 to $400 in wasted energy spend every year. Use caulk or sealant to close up any openings (however small) around doors, windows, and in air ducts to reduce air loss and save cash. Energy.gov estimates you’ll save up to 30 percent per year.
  • Install a smart thermostat – Smart thermostats like those from Nest and Ecobee claim to save you anywhere from 10 to 23% on your HVAC costs. In many cases, they might even qualify you for a valuable rebate from your energy provider.
  • Upgrade your insulation – Insulation is designed to help you control your home’s temperature — without your HVAC system doing all the work. If your insulation is old or thinning, you might consider adding another layer to increase its efficacy. If you don’t have insulation in areas like your basement, attic, or crawl space, add some ASAP to see immediate results.
  • Utilize fresh air as much as possible – Don’t use the AC or heat unless you really need to. If it’s temperate outside, open the windows and let the breeze do your cooling for you. If it’s sunny, shut off the heat and open the blinds. Letting fresh air handle the heavy lifting is a great way to reduce HVAC costs.
  • Retire old HVAC equipment – If your HVAC systems are more than 15 years old, they probably need replacing. Consider an Energy Star-rated appliance to get the most bang for your buck (and maybe even qualify for a rebate in the process). If your HVAC units aren’t yet that old, bring in a technician annually for a tune-up. Proper maintenance can go a long way in reducing your energy expenditures.

You should also be sure to clean and replace your air filters at least once a month (or as recommended by the system’s manufacturer). Dusting off the intake areas, as well as any baseboard or molding surrounding them, can also help increase their efficiency.


Your electricity is another large chunk of your energy charges, totaling around $125 per month on average (that’s $1,500 per year!). These costs are even easier to reduce than your heating and cooling costs, though. All you need are some upgraded light bulbs and a few new habits, and your expenses can drop significantly.

Here’s what to do:

  • Switch to energy-efficient light bulbs – If you’re still using incandescent bulbs, you’re leaving money on the table. LED bulbs use only a quarter of the energy incandescent ones do, and they last up to 25 times longer, too. CFL bulbs are also more efficient, though they don’t last as long.
  • Invest in solar panels – Solar panels can save you hundreds in electric costs every year. Depending on where you live, you may even get tax incentives or rebates for installing them.
  • Unplug all electronics when not in use – It sounds like a minor change, but unplugging appliances and electronics regularly can result in serious savings. Energy.gov calls unused electronics energy “vampires, as they continue to draw energy even when not in use. The biggest culprits are DVD players, TVs, computers, and large kitchen appliances.

If you have an electric water heater, lowering its temperature can also help. Unless you really need that scalding-hot shower, consider dropping the thermostat down to 120 degrees or below. Taking shorter showers can help, too.

Check out the table below for a list of cost saving strategies for reducing your energy bill:

How to save on your gas bill

Natural gas costs residents a pretty penny, too, with most states paying an average of $40 or more per month ($70 in Alaska!). Though this one is a little harder to cut back on without upgrading to electric appliances and systems, there are ways to reduce your gas use as well as the costs associated with it.

You can:

  •  Replace furnace air filters often – Just like with your AC system, furnace filters need to be clean and clear in order to function most efficiently. Make it a point to change yours out at least every few months.
  • Grill when possible – If you have a gas stove, you might consider using a charcoal grill for the occasional meal to cut down on gas usage. Just one less meal on the stove per week could make a significant difference.
  • Reduce your hot water use – If you have a gas water heater, any reduction in hot water use will reduce your costs. This means cutting down on hot loads in the washer, reducing hot water use when cleaning dishes, and holding back on those hot, post-work day baths.

While smart thermostats can certainly save you on electric costs, if you’ve got gas heating, they can also save you on gas as well.

How to save on your water bill

The average U.S. resident pays about $40 monthly in water costs or nearly $500 per year. This includes water used for showering, landscaping, cooking, washing clothes, cleaning, and more. Naturally, by cutting back on some of these activities, water use is reduced as well.

Here are a few other ways to reduce your water costs, too:

  • Take shorter showers – Swapping out baths for 10-minute showers can save you about 5 gallons of water per use. If you take hot baths, it will also save you on heating costs as well.
  • Install smart or low-flow shower heads – Swapping out your old shower head for a low-flow one can save you significantly on water use and electricity costs (about $145 per year, according to Energy Star).
  • Use appropriate washer settings – Don’t run a “large” load for only a few towels. Make sure you select the appropriate load size and choose the “economy” or “energy-saver” setting whenever possible. These options can cut down on both water and electrical use.
  • Fix leaks (even small drips) – Energy Star estimates that even a small drip can waste up to 1,661 gallons of water per year, equating to serious utility costs over time. Make sure to get any leaks, however minor, assessed and fixed by a professional as soon as possible.
  • Watch your watering times – Watering in the heat of the day will only cause the water to evaporate faster, meaning you’ll need to water more often and for longer to keep your yard healthy. For best results, water just before sunrise, when temperatures are cool (this is particularly important in the summertime).

How to save on your cable/internet bill

Americans spend an average of $162 per month on their cable and internet costs — and that doesn’t include extras like Netflix, Hulu, and other upgrades.

Here’s how to reduce your household’s cable and internet bills:

  • Bundle your services – Bundling your services will almost always qualify you for a discount, so if you have a different provider for your cell phone, internet, cable, and other in-home services, consider combining them into one single package. Many providers (like AT&T) for example, offer everything from cell service and cable to internet and home security.
  • Talk to your employer – If you work for a big organization, chances are they have contracts and negotiated discounts with various service providers. Talk to your HR department about any reduced-cost services you might be eligible for.
  • Try a bill cutting tool  – There are several unique services that will negotiate your bills on your behalf. You just give them your account info, and they’ll wheel and deal with your cable and internet providers to get you the best deal out there.

Finally, you can simply cut the cord. With so many streaming services and hotspots included in many cell phone plans, many people can get by without a full-blown cable or internet package these days. (If it means saving over $160 per month, isn’t it at least worth a try?)

The Bottom Line

High utility bills don’t have to be the norm. Consider getting an energy audit to assess your home’s shortcomings and identify potential areas for improvement. With a little extra effort and a few new habits, you should be able to increase your home’s energy-efficiency and reduce your monthly costs all in one.