This “checklist” series of articles looks at common areas of spending to identify a list of opportunities to reduce costs. Not every tradeoff opportunity will make sense for you, but we hope you find this a helpful compilation.
The costs of housing don’t end with the mortgage or rental payment. It costs money to keep the house heated (and cooled) 1 perhaps even both at the time time depending on who is adjusting what thermostat and to stay connected (phone, internet, cable, etc.).
Many of our household utilities have seen astronomical increases in the last year as inflation, supply chain disruptions and geopolitical uncertainties have wreaked havoc on the energy markets. In this article we’ll explore some of these costs and what can done done to control them.
Reducing Home Utilities
Shop your power bill
In Pennsylvania (and many other states), you have the right to choose your own utilities provider. For most homes supplied by PP&L or MetEd, this is as simple as a couple clicks of a button, and can save you significantly over time. Note that by changing providers, you will be changing the variable cost of supplying your electricity. The fixed cost (transmission) and your billing will continue to flow through your normal utility. A few things to be aware of here:
- Is the rate being quoted fixed or variable? Fixed rates provide certainty over some defined term. I generally prefer to use a Fixed Rate contract.
- What is the term? These can rate from 3 months to several years.
- What is the term? These can rate from 3 months to several years.
- Is there a termination fee? If not, you can lock in a long term rate but still have the right to switch early if energy prices drop and a better option becomes available.
Be very careful to shop again before the end of your fixed term. Many 2 Most? of the electricity providers will dramatically increase your rate at the end of the term to the cost of the unwary buyer. This isn’t difficult to avoid, but does require that you know / track when your term expires to shop again!
Reduce Home Utilities (Heating & Cooling)
This can be done in variety of ways:
- Temperature Control: This may sound obvious, but the easiest way to spend less is simply to use less energy and the most obvious place to do this is by not heating / cooling your home unnecessarily. A smart thermostat can be a good investment here to maintain the desired temperature.
- Improve-upgrade facilities & HVAC systems A simple approach is to make all improvements (i.e. adding insulation; energy audit, HVAC upgrades) for which out of pocket investment can be paid for in 3 years or less (e.g. if you pay $1,000 for smart thermostats that save $500/year in heating & air conditioning, the 3 year benefit is $1500).
- Investigate qualification for social service programs If financial circumstances warrant, explore available state, federal or local welfare programs designed to insure availability of adequate shelter / food / utilitiesPA site for these services is here
- Reduce routine maintenance utilities There is a wide variety of rates associated with servicing your home / utilities (repair or basic service charges vary as much as 3X). Shopping is key to paying less here. Word of mouth from trusted friends and family is helpful as well.
- Perform basic maintenance Basic preventative maintenance can extend the life of your larger equipment (Central air, boilers, HVAC, heat pump, etc.) and delay the much larger cost of replacement.
Reducing Other Utilities
Reduce Phones & Data Service Costs
- Downsize your phone and data plan or change providers. Cellular providers can be among the more complicated businesses to track and I will be writing more on this in the future. At a high level, there are certainly tradeoffs in switching carriers (potential repayment of a phone, hassle, etc) but in this industry carriers often pay significant incentives to get you to switch. If you are willing to undergo the change, there are often savings to be had.
- Check for employer discounts. If you work for a larger company check, they often have a lower corporate rate with wireless carriers…often including discounts for employees on their personal plans. Be sure to check this out. It may not be dramatic, but it is a very easy change to make with no disruption at all to your quality.
- Go Prepaid/ reduce data consumption We have grown accustomed to using our cell phones for everything from navigation to entertainment. If you can live short of “unlimited” data however (remember that Wi-Fi doesn’t count!) you can substantially cut into your monthly costs while sticking with the same familiar carrier.
Reduce Cable / Internet
- Discontinue or downsize cable/satellite services plans Cable packages range between $10/month and $200/month. Questions to ask here are
- Is there a better package that matches what you want at a cheaper price?
- Have you called your provider recently to see if you qualify for a promotional rate? On the latter, it is extremely common for internet and cable providers to offer discounted promotional rates then raise prices later. These increases can often be avoided or offset simply by calling your provider to see if another promotion can be applied.
- Consider becoming a “cord cutter” Increasingly, it is possible to eliminate the need for cable TV altogether by paying for the entertainmen you really use through nternet services are provided today as subscriptions and paid via ongoing monthly charges. Although the payment seems small, over time, it isn’t. Downsize (i.e., accept advertising) or eliminate subscription packages. Substitute modest streaming services for expensive cable-satellite services (i.e. Amazon; Netflix; or free YouTube).