All the food and grocery talk has left me in constant hunger, so it’s time to venture in to new territory, in the Summer of Saving series: utilities.

“Utility” is an old-school word that used to mean anything that had a direct line to your house: water, electricity, gas, land-line phone, cable. But as technology and consumption habits have changed over the last few decades, that direct line has blurred and taken on a slightly different meaning.

When I think of what classifies as modern “utilities”, there are two common themes that stand out:

1. A service is provided directly to you or your home
2. That service results in a recurring monthly/quarterly bill

What meets this criteria?

Traditional utilities, such as:

• Water service
• Natural gas/propane/heating oil
• Electricity
• Land-line
• Trash/other public utility service

But also newer/emerging home entertainment & telecom services:

• Cable TV or other television entertainment (Netflix, satellite, etc.)
• Satellite radio or other paid music services (i.e. Spotify premium)
• Internet (satellite, cable, DSL, dial-up, or other)
• VOIP
• Cell phone/mobile data plan

That’s right, home entertainment and communication – as services you get and pay for on a monthly basis – are not too dissimilar from traditional utilities. Think of all monthly recurring expenses as similar to the old-school utilities – but instead of a service being sent through a line directly to your house it could be sent over the airways as well.

You could even lump gasoline and insurance in, as they are both recurring service expenses, but they deserve a category all of their own. We’ll get to those no-good, filthy bastards later…

Expenditures in utilities and entertainment make up a pretty significant part of our spending. In 2011 (the most recent BLS consumer spending survey), the average and percentage of total spent in each category was:

• utilities: $3,727 (7.5%) – more than health care ($3,313)!
• entertainment: $2,572 (5.2%)

That’s $6,299 combined, or 13% of an average household’s spending. Significant, if not alarming. However, that would be 40% of a low spending household like mine, all else equal.

That’s pretty scary, if you want to live a low cost lifestyle. And these are categories that are seemingly scratching and clawing for more of our money. Whether it’s in the form of seemingly unjustified regular rate hikes that far outpace inflation (did you know that cable TV rates have been increasing an average of 5% annually?) or the latest and greatest new subscription service that everyone is raving about.

Why It is So Important to Get In Control of Utility & Other Monthly Expenses

How does one pay for such monthly recurring services? Via a slow (but ever-increasing) leak draining the money directly from your bank account.

The periodic, smaller, automatic nature of utility/entertainment expenses is exactly what makes them so dangerous. What’s another $50 here, $80 there going to hurt? The expenses are easy to justify, especially when everyone else is using these services.

So it’s up to you to fix the leak. Maybe you don’t fix it entirely, but you reduce the waste (even a 25% reduction would save most $1,500+ per year) by utilizing a combination of the following tactics:

1. Eliminating non-essential services altogether
2. Reducing consumption of essential services by changing your usage habits
3. Switching to competitive technologies/services that help you reduce consumption or costs further
4. Negotiating lower rates on the remaining services

That’s what we’ll be discussing/sharing strategy on over the next two weeks as we go through each of these services in greater detail. The collaboration should be fun.

Utilities & Entertainment Cost Discussion:

How much do you spend on each utility or form of entertainment? (and with what providers)

What utility/entertainment expenses would you most like to cut?