Rising Utility Bills Squeeze Household Budgets: How Families Are Coping Across the Country

If you’ve noticed that your utility bills have gone up, you’re not alone. J.D. Power estimates utility bills have shot up 41% in the last five years. There are several reasons for this significant jump, including inflation, rising energy demands, and climate change, to name a few.

Unfortunately, this increase is having a particularly harsh impact on already financially-strained consumers.

Here’s what you need to know about why utility bills are rising and how you can reduce your power consumption to bring down your costs.

Why (And How Much) Bills Are Rising

The cost of raw materials, investments in grid upgrades, and labor have risen sharply in recent years, which translates into higher costs and, ultimately, higher bills for consumers. Not to mention, the recent rise of AI is contributing to rising utility costs as data centers require an immense amount of energy.

All of this has boiled over to consumers seeing larger numbers on their utility bills. Here’s how much each utility has risen since 2020, according to national data:

• Electricity: Up 37%, climbing faster than inflation
• Natural Gas: Up 35%
• Water: Up 20%

Utility prices are also heavily determined by where you’re located. If you’re considering moving, it may be helpful to know where you have more (or less) expensive energy prices.

According to SaveOnEnergy, the states with the lowest energy bills include Utah, New Mexico, Colorado, Nevada, Illinois, Idaho, Wisconsin, Michigan, Montana, and Vermont. The states with the highest energy bills are Hawaii, Connecticut, Alabama, Texas, Maryland, Massachusetts, Florida, Arizona, New Jersey, and Georgia.

Utility bills vary widely by state—this map shows where Americans pay the most and least for essential utilities.

Impact on Household Budgets

Imagine receiving a utility bill for over $1,000. For most Americans, this isn’t a bill they can stomach. With stagnant wages and stubborn inflation, most Americans are at a loss, according to a new PowerLines survey. It found that 73% of Americans are concerned about electric and gas utility bills rising this year, with 80% Americans saying they feel powerless over how much they are charged for utilities.

Utilities now absorb 5% of a household’s annual budget, and nearly one-quarter of Americans have utility debt. This debt could be especially detrimental if it’s sent to collections, which could impact your credit score.

However, despite the economic picture looking dim, there are many resources available to brighten the room and your financial picture.

What You Can Do To Lower Your Home Utilities

Regardless of whether you’re a homeowner or renter, there are several things you can do to reduce your energy use and hopefully bring down your utility bills.

• Consider a programmable thermostat. You can get a smart thermostat for under $100, which can help you save up to 10% on your home energy bill.
• Upgrading your appliances. Older appliances tend not to be as energy efficient. Be sure to use Energy-Star graded appliances.
• Unplug appliances. Believe it or not, leaving things plugged in does use energy. The U.S. Department of Energy estimates 5-10% of home energy use is “phantom energy.” If you’re leaving for vacation or not using something for days at a time, unplugging it can make a difference.
• Use assistance programs when needed. If you’re financially behind on your utility bill, don’t hesitate to contact LIHEAP (Low Income Home Energy Assistance). They can help ensure you get the utilities you need.
• Switch to LED lighting. If you haven’t already, swap out old incandescent or CFL bulbs for LED lights. LEDs use about 75% less energy and last up to 25 times longer, according to the DOE. They’re especially effective in high-use areas like kitchens and living rooms.

Struggling to Catch Up?

Sometimes cutting energy use isn’t enough to regain control when prices keep climbing. If your utility bills are stretching your budget or causing other debts to pile up, consider exploring personal loan options or debt consolidation solutions. Options such as these can help you combine multiple balances into one manageable payment, lower interest costs, and protect your credit report and score from the fallout of missed payments.

As an additional option, use our free personal loan calculator to estimate monthly payments, analyze your current financial picture, and see how much you could save with just a few clicks in order to more efficiently cover debt costs or high utility expenses.

Final Thoughts

If your utility bill doesn’t seem right, start by reviewing it closely. Compare charges to previous months and check whether rates, usage, and fees match what your utility company advertises. Sometimes high bills result from estimated readings, faulty meters, or seasonal spikes, but it’s worth confirming the cause. Contact your provider to report any discrepancies you may find.

If everything looks to be correct, consider discussing a payment plan with them or any financial resources they may have if you’re falling behind. Ignoring the problem could lead to much worse consequences, and no one should live with their lights being turned off.