Utilities can eat up a fair amount of your monthly budget, with the average person spending about five percent of their income on electricity, gas, water, garbage and more. Add in other costs - like internet access, cable TV, and a phone plan -- and those costs increase significantly.
When you're moving to a new home, you should understand the likely cost of utilities ahead of time, so you can budget properly and make sure you have enough disposable income. We'll guide you through some methods you can use to estimate the costs of your utilities when you move.
Estimating costs of gas and electricity when you move
Heating, cooling and hot water will be the biggest contributors to your gas or electricity costs, with other appliances making up the rest of your main energy use. When it comes to calculating the cost of electricity or gas in your new home, there are five main areas to consider:
- How much electricity you use: Calculate based on the number of people in your home, the appliances you use, your habits and various other factors. It is the area that's easiest to control.
- How hot or cold the climate is: It's going to cost more to heat a home in Maine than in Mississippi. You'll need to understand how warm and cold the days are. Temperate climates are good too, because there's less spent on heating and cooling.
- The energy efficiency of your new home: Houses with good insulation and modern windows and doors will stay warmer in the winter and cooler in the summer.
- The size of your home: Larger homes require more electricity, so your new square footage plays a part.
- How expensive electricity or gas is in your location: Your new providers will have rates for each unit of energy you consume.
Although this isn't an exact science, here's a way to get a rough estimate of what your future gas and electricity costs might be.
- Track your electricity and gas usage over a year: There will be big seasonal trends in your energy usage -- far more used in the depths of winter and the heights of summer than at other times of the year. Look at your usage and payment history and estimate how much energy you're using both in specific months and across the year.
- Factor in the climate in your new location: The Department of the Environment estimates that you can save three percent on your electricity bill in winter for each degree you turn down your thermostat. Climate (and your willingness to put on a sweater!) can make a big difference to energy costs. Research average temperatures in the new location and look at how much they vary to where you are. Each degree of difference will impact your overall costs.
- Understand the size and energy efficiency of your new home: Factor in additional costs or savings based on how big or small your new home is, and whether it has good insulation and well-fitted, double-pane windows. An energy efficient home will deliver substantial savings.
- Talk to energy companies about regional rates in your new area: Underlying rates will have a big impact on utility costs. Talk to the main gas and electricity suppliers for your new location and understand how they charge, including any different plans they offer. Build those rates into your calculations.
- Ask the previous residents about their bills: If you're in contact with the previous residents, ask them what their average energy costs were. Even if you're not speaking with them directly, send a message through your realtor, as the previous residents have an obligation to provide you with this information. Although their individual energy usage may differ, those average costs provide a good foundation for the calculations you're doing.
Finally, factor all of these findings together to come up with a rough idea of what your future energy costs could be. It won't be perfect, but it should at least tell you if you're going to spend more or less, and what those costs could be. This will all help you to budget for electricity and gas accordingly.
Getting a HERS evaluation before buying the home
Before buying the home, it is a good idea to have it inspected by a certified energy auditor. The Home Energy Rating System Index, or HERS, is used to determine how energy-efficient a home is. This scoring system was established by the Residential Energy Services Network, or RESNET. The lower the home's index, the more energy efficient it is.
Some homeowners have their home's evaluated before they place it on the market, using a desirable rating as a way to attract buyers. However, if the home has not received a HERS rating, hiring an energy auditor can be a great help in spotting troublesome aspects of the home and in recommending energy-efficient improvements to lower your monthly costs.
Estimating costs of water and sewage when you move
Fortunately, estimating your other utility costs will be much easier than estimating gas and electricity. US households can expect to pay anywhere between $20 and $80 a month for water plus a sewage fee.
For water usage, you will either pay a fixed rate or pay based on what you use. Look at your current water usage over the year, the rate for each unit of water and what you pay now. Then contact the water provider in your new location, get their rates and understand how they charge. It's then just a case of multiplying your current usage with the new rates to estimate future costs.
There will be some variation to this, based on things like:
- The efficiency of appliances that use water in your new home: For example, dishwashers use much less water than doing dishes by hand.
- Whether you need to water the yard: In drier climates, you'll use more water keeping everything green.
- The mix of baths and showers: Baths use up far more water than showers.
- Sewage system versus septic tanks: If you're just connected to the city sewage system, you'll likely pay a standard charge each month, which you can request from the city. If you're on a septic tank or other system, you'll probably pay a quarterly fee but should research it more.
Estimating costs of trash and recycling when you move
This is another straightforward utility cost to estimate. Most cities or trash and recycling providers charge a standard, flat rate for collecting from your home. Just contact the relevant provider in your new location and ask them what the costs are.
Estimating costs of phone, internet and cable when you move
These types of utilities will vary the most widely from your current costs. That's because there's so much variation including:
- Who the providers are in your new location
- The rates they charge for various services
- How much you use those services
These are the utility costs that will be impacted the most by your lifestyle after you have moved. For example, if your commute length is different, or you're at a new job, your cell phone usage and costs are going to change.
We recommend comparing deals across mobile phone, landline, internet and cable providers for your new location. There are multiple websites you can use for these comparisons to help you make a more-informed choice. As an indicator:
- A landline will typically cost $20 - $45 a month
- A mobile phone can cost anything from $25 to $80+ a month
- A triple-play package of internet, cable, and phone service costs around $150 a month
- Online streaming services like Amazon or Hulu cost around $10 a month each
We hope you've found this guide to possible utility costs useful, and that it provides a useful starting point for budgeting when you're looking for your dream home.