The percentage of your net income you spend on utilities will depend to some extent upon how much effort you put into energy conservation. It also depends upon your living circumstances, such as your income level, where you live, the condition of your house or apartment and the age of your washer, dryer and dishwasher.
Video of the Day
[Quicken]https://quicken.intuit.com/support/help/budgeting-basics/the-most-recommended-household-budget-items/INF25635.html divides household spending into nine areas: emergency fund, housing, savings, utilities, health care, consumer debt, food and groceries, personal care and entertainment. It recommends spending up to 10 percent on utilities. Kiplinger makes similar budget divisions and also recommends spending up to 10 percent on utilities.
A 2012 National Public Radio article based on [U. S. Bureau of Labor Statistics]http://www.bls.gov/cex/ research, looks at household spending at three economic levels: households with incomes from $15,000 to $20,000; households with incomes from $50,000 to $70,000; and households with income of more than $150,000.
The lowest income families spent a little over 11 percent on utilities; middle-income families spent 8.2 percent; families with incomes over $150,000 spent only 4.8 percent.
Geographical and Other Factors
The implication of the NPR breakdown by income level is that budgeting for an item like utilities isn't entirely discretionary. A low-income family may spend proportionately more on heating and lighting than a wealthy family because the poor family has less money to spend on other relatively less urgent categories, such as entertainment.
Similarly, in certain geographic areas, most households will spend proportionately more or less than the national average on utilities because circumstances allow it or require it. In Hawaii, for example, your electricity costs will be seven times as much per kilowatt hour as they are in Washington state. Your heating costs in San Diego will be about 25 percent of your heating costs in Minneapolis. Substantial location-based cost differences exist in every utility category.
Controlling Utility Costs
No matter where you live, here are many things you can do to lower your utility costs. If electrical or natural gas costs are high in your area, for example, you may be willing to rebalance your budget by cutting back on Internet services. How much you spend on utilities depends upon your priorities and your particular living situation, including your geographic area.
Most power companies now provide detailed advice on lowering utilities costs, but here are a few suggestions that can make a substantial difference:
• Replace older washers, dryers and dishwashers with energy-efficient new models, Many power companies now provide financial assistance. The federal government has other programs to lower your replacement costs
• Replace incandescent bulbs with LEDs
• Turn off heating and air-conditioning whenever the house is unoccupied for more than an hour
• Try lowering your thermostat a couple of degrees in the winter and raising it a similar amount in the summer