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Budgeting Utilities + Tips to Lower Utility Bills

There are a few ways that might be helpful when budgeting for utilities. I can tell you upfront that when we began, we took a complete guess based on the square footage of our rental and hoped that it wouldn’t be over that amount. It was. Not by much, but it was enough to raise our budget a bit. This was in winter, and we live in a cold area. A few months later and our bill was half of what it had been. So how do you budget for utilities when the weather changes monthly?


Budgeting for Utilities


For us, we have a set budget amount that is the high end of costs for the year. This means that we account for the coldest days in winter and the hottest days of summer and set our budget according to those days. We don’t average. In the spring/fall months, when our bills are gloriously low, we apply any extra money towards our “Baby Steps.”  Previously, this meant putting them to debt. Now, this means transferring that money into our 3-6 month emergency fund. It all depends where you are with your personal financial journey.


We have our utilities set up to pay the bill in full each month. The money is taken directly out of the bank, and I get a confirmation email when this is done. Then, I put any extra money where it belongs.  For example: If we had $75 budgeted for our Natural Gas, and I received a bill for $50, I would immediately put that money elsewhere. When in Baby Step two, I would go and make a student loan payment for $25. Today, I would make a $25 transfer into our emergency fund.


This may seem small, but you want every penny working for you. Even the little payments add up, especially when you are paying off debt. Every payment causes less interest to accrue. This is why you want to make those payments immediately when budgeting utilities. The key is to put the money where it belongs immediately. If you don’t do this, it’s easy to end up with an “extra” $20 to spend on unnecessary things. You don’t want that. You want to tell your money where it belongs and make it work towards your goals.


Just to be clear, this isn’t the only way to budget utilities, just the way that we choose to and what has worked well for us. Some utility companies allow you to average out the costs, but I like being the one in control of what is budgeted. Learning to adjust can take some time.

Lowering Your Utility Bill


Also, some tips for lowering your utility bill (these might not be groundbreaking, but every little bit helps!)


These tips are excellent for the environment no matter where you stand financially!

  • Open your windows and turn off the lights
  • Remember to make sure your outdoor lights are off too!
  • Turn off your sink when you brush your teeth
  • Use the “Sleep Timer” on your TV – we always fall asleep to the tv, but this keeps the electricity waste to a much smaller amount!
  • Unplug things when you aren’t using them – I don’t do this with anything that has a clock on it because that’s a huge pain, but things like phone chargers, hair tools, electric tea kettles) are easy fixes.
  • Brush your teeth in the shower  – some people may not like the warm water fyi
  • Shower warm, not hot.
  • Wash laundry on cold water
  • Hang dry clothes.
  • Open windows on opposite sides of the house to create a crossbreeze. Opening one window might not do much, but once you get that breeze in, it’s great!
  • Go natural with your hair – no heat tools=no electricity used.

With Motivation,


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