Are you ready to discuss one of the biggest financial mysteries of our time? Yeah, the electric bill. You know what you’re paying each month… and that’s about it! And you can’t change something you don’t understand, so let’s break down the electric bill and look at some easy ways to lower your electric bill.
Understand your billing plan
Your electricity bill may be bundled in with other municipal bills, including water and gas. They should be clearly labeled, but you can tell the difference between them by the units of measure. Gas is measured in BTUs, water is measured in gallons and electricity is measured in kilowatt hours.
What are kilowatt hours?
The funny thing about kilowatt hours is that it’s a unit of measure only used to measure electricity. You will likely only ever see kilowatt hours (or kWh) on your electricity bill. kWh is a unit of energy that’s equivalent to one kilowatt of power expended for one hour. What you really need to know about kWh is that you need to look at time periods that are exactly the same. If you’re comparing kWh month-to-month, be sure the months have the same number of days. If not, you’ll want to compare average kWh per day.
Understand that you pay for more than direct use
On your bill, you should see a breakdown of charges that may include fees to help maintain the grid and administrative fees that go towards the salaries of the electric company’s staff. You’ll also see taxes, supply and delivery charges. The only charge you can affect is related to your electric usage.
This should give you a better understanding of how to read your electricity bill, but it won’t tell you where you may be using wastefully. However, if you’re like most of us, you can cut back in these five areas.
Electric Heat – If your heat is electric, this is going to take up the lion’s share of your bill. Cut back by getting a programmable thermostat, so you can reduce the temp while you’re away, and keeping your home a degree or two cooler than usual. You can save 3% on heating costs for every degree you lower the thermostat.
Vampire energy – Did you know that every plugged-in device draws electricity, even when it’s not in use? Unplug everything you’re not using. This includes cell phone chargers, coffee grinders, DVD players and gaming consoles.
Sleeping computers – If you’re one of those people who leave their computer on standby or sleep mode constantly, this is a habit to break. Even when it’s not plugged into an outlet, your standby computer is raising your electricity usage by accessing the wifi. What a waste!
Running refrigerators – Your fridge is one of your home’s largest appliances, and it can’t be turned off when you leave the house. But you can save electricity by keeping the temperature between 35 and 38 degrees Fahrenheit and making sure the area behind and around the fridge is clear (this helps with ventilation, which maximizes efficiency).
Hot water heating – In addition to taking shorter showers and washing dishes by hand, you can save money by changing the temperature on your hot water heater. You stand to save as much as $100 annually by dropping the temp from 140 to 120.
By understanding the electric bill and the devices that draw the most energy, you can start making simple changes that may drastically reduce what you owe to the electric company.
Do you have a hard time understanding your electric bill? Share with me in the comments!!