How to Save Money on Utilities: Energy, Water and Bills

To save money on utilities, focus first on heating, cooling and hot water, which use the most energy in a typical home, then fix leaks, check your rate plan and ask your provider about programs you may qualify for. How to save money on utilities comes down to two things: using less, and paying less for what you use.

This guide covers the changes that tend to matter most, from the thermostat to the water bill, plus the help available if bills are already hard to pay. It focuses on the US; programs and rules differ in other countries, so check your energy regulator or government's official pages.

Where does your utility money go?

For most households, the biggest share goes to heating and cooling, followed by water heating. The Department of Energy puts water heating at about 20% of household energy use, making it the second-largest energy expense after heating and cooling.

That's why switching off a single light rarely changes the bill much, while a thermostat habit or a sealed duct can. The same principle, biggest costs first, runs through our step-by-step method to save money.

How can you cut heating and cooling costs?

Start with the thermostat, then stop paying to heat or cool the outdoors.

Use thermostat setbacks

According to the Department of Energy, you can save as much as 10% a year on heating and cooling by turning your thermostat back 7 to 10 degrees Fahrenheit for 8 hours a day from its normal setting, such as while you sleep or are at work. A programmable or smart thermostat makes this automatic.

Seal leaks in ducts, doors and windows

The Department of Energy estimates that in a typical home, about 20% to 30% of the air moving through the duct system is lost to leaks, holes and poorly connected ducts. It also says heat gain and loss through windows accounts for 25% to 30% of residential heating and cooling energy use.

Cheap fixes come first: weatherstripping, door sweeps, caulk around gaps, and heavy curtains or blinds used at the right time of day. Renters should ask the landlord before making changes, but most of these are removable.

Keep the system working well

Replace or clean filters as the manufacturer recommends, keep vents clear of furniture and use ceiling or portable fans so you can feel comfortable at a less extreme setting.

How do you lower your water heating and water bill?

Hot water costs you twice: once for the water and again for the energy to heat it.

• Fix leaks, especially hot ones. The EPA says the average household's leaks can waste more than 9,300 gallons of water a year, and fixing easily corrected leaks can save homeowners about 10% on water bills. It also says 9% of homes have leaks wasting 50 gallons or more a day.
• Check for silent toilet leaks. A few drops of food coloring in the tank that show up in the bowl without flushing point to a leaking flapper, which is usually an inexpensive part.
• Take shorter showers and install a low-flow showerhead if yours is old.
• Wash clothes in cold water and run the dishwasher and washer only with full loads.
• Lower the water heater setting if it's set high, following the manufacturer's guidance and keeping scald safety in mind.

How can you cut your electricity use?

Once heating, cooling and hot water are handled, look at what's plugged in.

• Switch to LED bulbs as old bulbs burn out; they use far less electricity than incandescent bulbs and last much longer.
• Turn off idle electronics at the power strip, especially game consoles, TVs and computers that sit in standby.
• Air-dry laundry when you can. If you're replacing a dryer, the Department of Energy says ENERGY STAR models use 20% less energy than conventional ones.
• Think long term when replacing heating equipment. The Department of Energy says modern heat pumps can cut electricity use for heating by approximately 65% compared with electric resistance heating. That's a big purchase, so compare quotes and total costs first.

For more ways to trim household bills beyond energy, see our money saving tips for everyday life.

Can you pay less for the same energy?

Sometimes, without changing your habits at all. Call your provider or check your online account and ask:

• Am I on the best rate plan for how I use energy? Some utilities offer time-of-use plans that charge less at off-peak hours. They help if you can shift laundry and dishwashing to those hours, and can cost more if you can't.
• Do you offer budget billing? It evens out payments across the year. It makes planning easier but doesn't lower the total.
• Are there discounts or rebates? Many utilities offer rebates on efficient equipment, free or low-cost home energy checkups, or discounts for eligible households.
• Can I change my due date? Lining up the bill with payday can prevent late fees.

In some states you can choose a different electricity or gas supplier. Read the contract carefully: low introductory rates can switch to higher variable rates, and early termination fees can wipe out any saving.

Phone and internet count as utilities in many budgets. Eligible low-income households can get a monthly discount through the FCC's Lifeline program, and our 30-day plan to save money fast includes calling providers about cheaper plans.

What help is there if you can't pay your utility bills?

Ask for help early, before a shutoff notice. USAGov lists two main federal programs:

• LIHEAP (Low Income Home Energy Assistance Program) can help pay heating or cooling bills or provide emergency services during an energy crisis. You apply through your state or territory's office; eligibility, benefit amounts and application periods vary.
• The Weatherization Assistance Program (WAP) helps eligible households with home improvements that save energy. Contact your state's office.

Also ask your utility about hardship programs, payment arrangements and seasonal protections, which vary by state. Our guide on how to save money on a low income covers other benefits and free help.

Are energy tax credits still available?

Check before you plan around one. The IRS says the Energy Efficient Home Improvement Credit applies only to qualifying property placed in service by the end of 2025, so upgrades made now may not qualify. Utility and state rebates can still exist; ask your provider and your state energy office.

Other countries run their own schemes, such as grants for insulation or heat pumps, and they change often. Check your government's official energy pages.

Next steps

This week, set a thermostat schedule, check your toilets for silent leaks and log in to your utility account to see your rate plan. Then call your provider with the questions above.

Move whatever you save each month into savings so it doesn't disappear into everyday spending. Our simple plan on how to save money ties bills, food and savings together in one monthly routine. To explore ways of adding income on top, see our guide to making money online.