Invest

how to invest

Live

career, food, travel

Save

saving, credit, debt

Protect

insurance, security

Retire

401K, IRA, FI, Retire

Home » Save Money, Summer of Saving

Plugging the Leak of Monthly Recurring Utility & Entertainment Expenses

Last updated by on 16 Comments

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

utility expensesHow 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?


About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


16 Comments »
  • Sarah says:

    Good post!

    Here’s what we spend on utilities each month:

    Water: $12
    Heat & Electric: $175 (average)
    Trash Pick-up: $27
    Cell Phones: $110
    Internet: $50
    Netflix: $8

    Of these, I would most like to cut back on our cell phones. I’m on Page Plus for $30/month but my husband is still clinging to his unlimited data plan through Verizon for $80/month… even though he only really uses about 2 GB per month. Hoping to talk him into making the switch once his contract is up. ;)

    • ~Matt~ says:

      I believe Net10 has a unlimited everything plan for around $45 a month and there are quite a few phones (I phones included)that can be switched to there service and maintain the current number and phone.

    • ~Matt~ says:

      Sewer/water/Trash $55 (the apartment facility combines these in a bundle, which I do not agree with since I pay the same monthly as a family of 3/4 in the same apartment.

      Heat – Electric Unknown cost till fall,Re-insulated my ceiling at my cost.
      Internet – $37.00 (mobile hot spot)
      Phone $16 (net ten 200min plan)
      Cable -cord cut 2012 and using antenna 10 channels and redbox,local pawn shop sells dvd’s for $2-5 I allocated $20/month and I have quite a collection.

      Approx. $130

  • Mike says:

    Water/Trash: $42
    House Gas: $25 summer (winter bill $60)
    Electric: $25-35 (I haven’t had a hot summer month of peak electric use at my new house yet)
    cell phone: $65
    Internet: $35
    Entertainment: It varies from month to month, but usually it is $150 or less. I don’t have cable TV or any subscription video service.

    First of all, my trash bill is $17 per month, and I barely generate 1 bag of trash per week. So, I’m paying $4 a week for one bag of trash pickup :(

    I really can’t cut back on those expenses at all, as my water bill is as cheap as it can possibly get, and I use an automatic thermostat to turn off the HVAC when I am not home. The only thing I could do would be to eliminate either my cell phone data or my home internet to save about $30 monthly. I already meet my savings goal, so I enjoy having those luxuries.

  • Jake @ Common Cents Wealth says:

    We spend about $200 or a little less every month on utilities.

    Water/Sewer/Trash/Recycling: $50 a month
    Internet: $30 a month
    Electricity: $50 a month
    Natural Gas: $50 a month

    I know we’re not on the low end, but we’re also not on the high end. We try to keep our house temperature down in the winter and up in the summer in order to conserve energy. Also, our house has great windows, so that helps.

  • Aaron says:

    I have an apartment so I don’t have the same number of utilities as some others, and I get to split with roommates. My portions of the bills are as followed:

    Combined heat/AC and electric: $28-$40
    Super basic cable and internet: $22
    Cell phone: $66
    Netflix: $17 with tax
    Spotify Premium (love it): $10

    I think the roommate effect really helps these numbers out.

  • Lexi says:

    For me and my husband:

    -Cell phone: $57 (we split a family plan with my parents and sister)
    -Water: $35
    -Netflix: $12
    -Electricity: ~$150 in warm months, ~$250 in cold months.

    We do have a housemate which inflates the water and electricity a bit. Electricity is the area I most want to cut down on. We had some pretty big electric bills last winter. Heating our house just seems to be really expensive, even though we leave the thermostat at 68 all winter. We have a few long-term improvements planned (adding insulation to the house, getting a wood stove, etc), that will hopefully help for next winter.

    We’ve never had trash service, landlines, TV, or data plans for our cellphones. We had internet until very recently when we decided to drop that too.

    Before we dropped internet though, we got a 40% reduction in internet just by calling. We told Comcast they were too expensive, and they immediately dropped the price back to the promotional one. If you’re looking to save some money on internet, just call and ask!

  • Leah Hortin says:

    Just moved into a our first home so not entirely sure on all the utility costs yet…

    Verizon cell phones (2 unlimited plans grandfathered in + employer discount): $162/mo
    Comcast internet (upgraded from standard): $82/mo
    Netflix (instant + 2 discs): $25
    Water/Sewer/Garbage (through the city): $30/mo
    Yard waste (through a neighboring city): $8/mo
    Puget Sound Energy: $60/mo summer to $180/mo winter
    Propane tank for fireplace: $60/yr

    We’ve already decided against cable and a landline to save money and opted for Netflix instead of cable.

  • Glenn says:

    Maine (cold-brrrr!!)

    Electric $37/month average
    Internet $20/month (we share with our in-laws next door)
    Cell phones $15/month (Tracfones)
    Trash $6/month (we have curbside recycling)
    Water $0 (we’re on a well)
    Heating Oil $200/month average (the biggie)

    TOTAL $277/month

    Heat is our biggest need in Maine. We probably won’t change from oil until our fairly new furnace breaks down… We save big on internet, water and cell phones, though. But we still get hit with the oil.

  • For reference, my husband and I rent a 1200 sq. ft. townhouse in North Carolina.

    I’ll share our budgeted numbers – our actual spending averaged through the whole year is a bit less than this amount.

    electricity and gas: $100
    water/sewer: $35
    internet (Time Warner): $40

    We have Netflix but it is a perennial Christmas gift from our parents so we pay nothing for it. We don’t pay for any TV – we just have an antenna. And yes, we watch sports!

    The utility we’ve worked the most at to reduce our expenditures is our smartphones. My husband has an iPhone on Verizon but he got the smallest package that fits what he wants – data and voice (he uses Google Voice so he doesn’t need texting). His phone is $70/month. I use Republic Wireless, so I pay $22/month for unlimited talk, text, and data (my review of the service is in my link). We didn’t want to both jump into this experimental service so we were happy to keep my husband’s phone on Verizon, but when his contract ends we will definitely consider switching him to Republic Wireless as well because it’s working out for us.

    total (always less than): $267

  • Roger says:

    Electric: $150 in the summer, $100 in the winter
    Cable/Internet: $110
    Cell Phone: $80

    I would love to cut down on the electric bill. It seems ridiculous that my small apartment takes $150 to cool in the summer and $100 to do nothing in the winter (I usually don’t turn on the heat). I’ve been wondering whether having all of my electronics (TV, TiVo, computer) plugged in during the day affects the bill in any way and if I can just shut off the surge protectors before I leave every day.

    I’ve been slowly decreasing my cable bill, most recently by cancelling the NHL channel. As for the phone bill, I’m not sure if I can get it any lower for now.

  • Derrick says:

    1700 sq. ft home in East Georgia. My wife, myself, and our dog.

    Electric: $70 (average-less in winter)
    Natural Gas: $32 (average-less in summer)
    Cell Phone: $30 (average) Ting is awesome!
    Water: $34
    Internet: $40
    Netflix: $8

    Average Monthly Total: $214

    We use an antenna for over the air TV. We do not have trash service – We try to be careful of what we purchase for minimal packaging and compost/recycle heavily.

    We use Ting for our cell phone service. I recommend them to everyone! Here’s a free $25 credit towards service: https://ting.com/r/zanhb71osn2

  • Margo says:

    Wow!! I just looked over and came out with these final results :

    Electrical $213
    Water/Sewer $145
    Cable $25
    Internet $86
    Cell phones $100 (me/husband)
    Vet $35
    Terminix $35

    Total $640

    *That’s for a family of 6/South Florida

SPEAK YOUR MIND

Enter your:


Home | Sitemap | Terms | © 20somethingfinance.com