Cutting Utility and Phone Bills

Utility bills feel fixed: the bill arrives, you pay it. In fact each one is the sum of hundreds of small choices about temperature, water, appliances and plans, and many of those choices cost nothing to change. This chapter shows how to read your bills, where the biggest savings usually are (heating and cooling), how to cut standby power and water waste, how time-of-use rates work, and how to bring phone and internet bills down. It ends with how to judge whether an upgrade pays for itself.

Start with the bills

Before changing anything, collect a year of electricity, gas, water, phone and internet bills. Most utilities let you download usage history from your online account. Look for four things:

• Your rate plan. A flat rate, tiered rates that rise as you use more, or time-of-use rates that change by hour.
• Fixed charges. The monthly connection or service fees you pay regardless of use. Usage changes do not touch these.
• Seasonal swings. A summer or winter bill far above the spring and fall ones points to heating and cooling as the place to start.
• Year-over-year change. Compare each month with the same month last year. A jump with no change in the weather or the household can mean a failing appliance, a leak or a rate change.

Many utilities offer a free or low-cost home energy assessment and rebates on efficient equipment. Ask what yours offers before you spend money on upgrades. Budget billing, which spreads the year's cost into equal payments, makes bills predictable but does not lower them.

Heating and cooling: the biggest lever

Heating and cooling are usually the largest share of a home's energy use, so small changes to the thermostat matter more than anything else on this list.

The US Department of Energy estimates you can save as much as 10% a year on heating and cooling by turning the thermostat back 7 to 10 degrees Fahrenheit for eight hours a day, for example while you sleep or are at work. Its suggested starting points are 68 degrees in winter while you are awake and lower while you sleep or are away, and 78 degrees in summer when you are home and need cooling. A ceiling fan lets you set the thermostat about four degrees warmer in summer with no loss of comfort, because moving air feels cooler; turn it off when you leave the room, since it cools people, not rooms.

Free and cheap changes come next: replace the furnace or air-conditioner filter on schedule, keep vents clear of furniture, close blinds on the sunny side in summer and open them in winter, and seal gaps around doors and windows with weatherstripping and caulk.

A programmable or smart thermostat automates the setbacks so you do not have to remember them. Whether it pays depends on what it costs and how much it trims.

A thermostat that costs $150 and lowers the bill by $12 a month pays for itself in 13 months, and everything after that is saving. The same sum works for any upgrade: divide the cost by the monthly saving to get the payback in months. A payback of a year or two is a good deal; one longer than the time you expect to stay in the home, or the life of the equipment, is not. If you already set the thermostat back by hand, a smart one saves much less.

Standby power

Many devices draw electricity even when they are switched off or idle: televisions, game consoles, set-top boxes, computers, printers, chargers and anything with a clock or a remote control. Each one draws little, but the draw never stops, and a home may have dozens of them.

To find the worst offenders, use a plug-in power meter, which shows what a device draws in standby. Some utilities and public libraries lend them. Then:

• Plug entertainment and office equipment into a switched or smart power strip that cuts power to everything at once.
• Turn on the power-saving settings on computers, consoles and televisions; some default to an always-on "quick start" mode.
• Unplug equipment you use rarely, such as a guest-room television or a second printer.

Unplugging a phone charger saves very little. The gains come from the equipment that stays on all day.

Water and water heating

The EPA estimates that household leaks can waste nearly 10,000 gallons a year. The common culprits are a running toilet, a dripping faucet and a leaking showerhead. To check a toilet, put a few drops of food coloring in the tank and wait 15 minutes without flushing; color in the bowl means the flapper leaks, usually a cheap part to replace.

Then reduce what flows when nothing is wrong:

• Showerheads. The federal maximum for new showerheads is 2.5 gallons a minute. Models labelled WaterSense use no more than 2.0, and the saving applies to hot water, so it shows on the energy bill too.
• Faucet aerators are inexpensive and screw onto most taps.
• Toilets. Newer toilets use 1.6 gallons a flush or less, and WaterSense models 1.28. Replacing a working toilet rarely pays for itself on water alone, but if one needs replacing anyway, choose an efficient model.
• The water heater. The Department of Energy suggests 120 degrees Fahrenheit for most households; many heaters ship set higher. Lowering it cuts heat loss from the tank.
• Laundry. Most of the energy a washer uses goes into heating water, so washing in cold water and running full loads cuts the bill with little difference for everyday clothes.

Time-of-use rates

Some utilities charge more for electricity at peak hours, often late afternoon and early evening, and less at night. If you are on such a plan, or can choose one, shifting flexible use to cheaper hours saves money without using less: run the dishwasher and laundry on a delay timer, and charge an electric car overnight.

Do not switch plans blindly. A time-of-use plan helps households that can move a lot of use off peak and can cost more for those who cannot, for example someone home all day in summer with the air conditioning on. Many utilities will show what your last year would have cost on each plan.

Phone, internet and the other monthly bills

These bills are often the easiest to cut because they are pure contracts, and the provider would rather keep you than lose you.

• Check the plan against your use. Many households pay for more internet speed or mobile data than they use. Your account shows your actual data use.
• Compare prices, including smaller mobile carriers that run on the major networks at lower prices.
• Call and ask. Tell the provider you are comparing offers and ask what they can do. If the promotional price on your plan has ended, ask for a new one.
• Remove extras you do not use: equipment rental when you could own the modem, device protection plans, add-on channels.

Small monthly savings across several bills add up.

Savings of $35 a month across energy, water and phone bills come to $420 a year. Moved into savings automatically, at an assumed 5.0% a year, they grow to about $5,403 over 10 years.

A note on upgrades and tax credits

Bigger upgrades, such as insulation, a heat pump, new windows or solar panels, can cut bills substantially but cost much more, so the payback test above matters more. The federal tax credits for home energy-efficiency improvements and for home solar ended for work completed after December 31, 2025, under the budget law passed in July 2025. State programs and utility rebates may still lower the cost; ask your utility and your state energy office before you buy, and check IRS guidance if you completed work in 2025.