How to Cut Down Your Electric Bill


Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
This post may contain affiliate links, meaning I’ll receive commission at no extra cost to you for your purchase.*

Let’s be honest. We all need electricity. If you’re reading this electricity, is what keeps you going throughout your day. And we just can’t seem to get enough of it.

Until the electric bill comes in.

So what can you do? How can you meet your energy needs and keep your wallet plump?

Here are some top tips for cutting your electricity bill ranging from simple things to save just a bit of money to large steps that can eliminate your electricity bill.

How to Cut Your Electric Bill by 1/3

Cutting your electric bill by 1/3 is an incredibly easy task, but the problem is that we’re often too lazy to do it.

I’m guilty of being lazy too, so don’t beat yourself up too much.

Tip 1: Unplug Things

You may have heard that unplugging things can cut down on your electric bill. You also may have thought to yourself that that is ridiculous.

But before even thinking about random appliances like your toaster, let’s first consider your TV.

Every television that I know of has a little light that stays on at all times when plugged it to let you know that it is in standby mode. If this little light is only 1 watt it costs you about 8 cents a month to run it.

For any one interested, 1 watt equals about 0.024 Kilowatt Hours (KwHrs) a day. A Kilowatt Hour is how your power company bills you. Multiply 0.024 KwHrs by 30 to get 0.72KwHrs a month, times roughly 12 cents per KwHr equals $0.0864 a month. It sounds small, but every little bit counts.

Now consider that electricity constantly moves through plugged in appliances at a slow rate (which is what allows it to turn on immediately when plugged in) which is slowly bleeding electricity. That means it is racking up your electric bill.

It really does start to add up.

Key Idea: Unplug everything you can (or use a power strip because the breaker will stop the movement of electricity).

Tip 2: Increase Efficiency

Now that you are unplugging (most) everything you can focus on the next step in cutting your electric bill. Things that are plugged in. Many items we use everyday are VERY inefficient. Meaning they use a lot of energy unnecessarily.

Light bulbs are a prime example. Whatever you do, do NOT go cheap on a light bulb!

I’m not saying that you need to by the fanciest light bulb you can find, but consider the number of watts the light bulb uses and the average lifespan of that light bulb, and you’ll understand why you should buy more expensive bulbs.

For example, a $4 light bulb that is 100 watts versus a $5 light bulb that is 50 watts. If left on for a full 24 hours that 50 watt light bulb will use 14.4 cents less than the 100 watt light bulb. In just about 7 straight days of use it more than pays for the difference.

To put this difference into perspective an LED light uses just over 8 watts and is incredibly bright compared to the average 60 watt incandescent light bulb AND they last up to 50 times longer.

If you haven’t put LED lights into your home you are overpaying in the long run by a lot!

There are so many ways that you can increase energy efficiency in your house, but light bulbs are the easiest.

Key Idea: Change any incandescent light bulbs for LED lights (don’t even wait for them to burn out).

Tip 3: Decrease Waste

The final and most important step to cut your electric bill by 1/3 is to stop wasting electricity. This is the classic dad walking around the house yelling “shut the window” and “turn off the lights” and “I’m not paying to cool down the whole planet”.

Turning unused lights off is helpful, but the biggest problem is wasting AC and Heating.

How to reduce heating costs

To run your heating unit you have to suck cool air in and pump warm air out. This pumping pushes warm air through every crack and slit in your house. Losing precious heat. The number one culprits for this leak are doors and windows.

Take steps to fill in the spaces created by your doors and windows. Weathering strips, for example, can stop airflow out of the house. You can get a door draft strip*, sealing strip* for closed doors and windows, or a foam sealing strip*. Even a simple caulk* around the edges can do a lot of good for windows.

Stopping the air form getting out means less cold air your heater has to heat up, and that means less money spent on heating it up.

How to Reduce Your AC Bill

The AC bill is basically the same as the heating bill. Stopping air from escaping is your number one priority.

Once you’ve done that, use fans to stay cool for as long as possible.

Shading your home from the sun is also helpful. So plant a tree or get good curtains. Anything to stop your house from heating up to the point you need to turn your AC on.

Key Idea: Stop air from getting out of your house and turn off unused lights.

How to Cut Your Electric Bill in Half

Now that you’ve taken the basic steps to cut your bill by 1/3, you can start to take more long term steps to cut your electric bill in half.

To cut your electric bill in half you must also do all of the steps to cut it by 1/3.

These steps will cost money upfront, but they will pay you back relatively quickly. Don’t be scared by the price tag because they will start saving you money immediately.

Tip 1: Buy More Efficient Appliances When Replacing Old Ones

Of all of the tips in this section, this one might be the hardest to see how it can reduce your electricity bill, but keep in mind that each year our appliances get more and more energy efficient. If you have appliances from the 60s you are losing money by not upgrading.

Now, should you go crazy buying new appliances? maybe not. Just focus on the ones that take the most energy first. A dryer is a huge money sucker, so if you have an old inefficient one a newer one makes a lot of sense.

Here is a good way to look at it. Look at the difference in the efficiency rating (those stars on the appliance which also tells you roughly how much it will cost you each year) and ask: Is the increase in price worth how much less it will cost me each year? If it will pay you back in five to ten years then it probably is since most appliances last at least that long.

Most important, however, is to consider replacing an older furnace and AC unit with a much more efficient one. These are very expensive, but if you have the means to do it without holding a balance on a credit card, then get a super efficient one. Don’t flake out at the last second over $1,000 difference. It will pay you back to get the most efficient unit you can afford.

Key Idea: Get the most efficient appliances when buying them because it will save you money long term.

Tip 2: Check Your Windows for Efficiency

Windows are a huge whole in your wall that lets heat (or cool) in and out. So plugging that leak is an important step in cutting your electricity bill in half.

If you have any of the worst types of windows you need to consider replacing them.

List of least effective windows to the best by type
  1. Plastic wrap duct taped to the walls (please don’t actually do that)
  2. Single pane windows
  3. Windows with cracks in them (a double pane cracked window is slightly better than single pane)
  4. Aluminum frame windows
  5. Cardboard box shoved in the hole–effective for blocking air, but not for sight seeing
  6. Wood frame window (great until they rot)
  7. Vinyl frame windows
  8. Fibrex frame windows (exclusively by Renewal by Andersen–I’m not affiliated, I’m just convinced they’re the best).

Numbers 1-5 are the least effective and should be replaced. 6 needs to be replaced if it is starting to rot. 7 and 8 are very effective windows unless cracked or broken in some way.

Key Idea: If you have inefficient windows, replace them.

Tip 3: Add More Insulation

You might be thinking that adding more insulation is impossible way to cut your electric bill. After all, the house is already built. In many ways you’re right, but there are a few quick wins that can help and some other things you can do if the opportunity arises.

First, check your attic

The attic is a huge place for heat to escape (ever heard the saying heat rises?). Overtime the insulation can flatten, losing effectiveness, or become displaced for many reasons.

Go up into your attic and just see if your insulation looks thick and even. IF there are low or bare spots those need to be addressed. Having more insulation won’t hurt, so if you are unsure then get some more up there.

The biggest culprit for air leaking into your attic is the attic access itself. Make sure there is a piece of insulation covering the hatch to reduce the amount of air lost through the access point.

Second, check your crawlspace

If you have a crawlspace there should be insulation between the bottom of your house and the floor. That insulation can very easily fall down or get wet. If either of these things happen either reinstall the fallen piece or replace the wet insulation (after stopping whatever got it wet).

The hatch between the crawlspace and the floor is also an often uninsulated space. Something like this insulation board* would work well there.

Third, insulate walls better if you can

Sometimes there is an opportunity to put insulation in an exterior wall. If you get a hole in your wall for whatever reason, take that time to check for insulation.

If it is sufficient, great. If not, making the hole wide enough to add additional insulation won’t add that much more to the cost of the patch job and will save you some money in the long run.

Unless you know that an entire wall is without insulation it doesn’t make sense to tear out your walls and start over.

Key Idea: Put additional insulation in your attic and crawlspace, especially covering the access hatches.

How to Cut Your Electric Bill by 90%

Remember that to cut your electricity bill by 90% you need to do everything to cut your bill by 1/3 and in half as well as these next tips.

Cutting your electric bill by 90% is no easy task. This post assumes you’ve been doing everything wrong up until this point, so if you don’t get a full 90%, just know that the point is you should have a huge decrease.

To get such a large decrease will take some sacrifices, but your wallet will thank you.

The main causes of your large bill are heating and air conditioning. So reducing the use of those will be your number one priority.

As a side note, this may not be possible in extreme temperature places like Arizona and Alaska, but you can still get some gains on your bill.

Tip 1: Change the Thermostat

You may have heard that one or two degrees on the thermostat can make a huge difference on your electric bill. While that is true I have saved this tip until now because it requires sacrificing comfort.

To be completely effective, try changing your thermostat one degree (either warmer or colder depending on the season) for three days. If you are still comfortable, then move it another degree.

Only stop once you start to feel uncomfortable. But don’t turn it back up. In the winter put on thick socks, a jacket, and maybe even a snuggy. You’ll be fine and it will make a huge difference.

In the summer time wear baggy clothing and use fans for circulation. You will feel cooler with much less energy used.

A smart thermostat* can help you do this easily.

Key Idea: Increase the thermostat in the summer and decrease it in the winter until you are not totally comfortable for maximum savings.

Tip 2: Pull Cool Air in at Night

Usually the temperature drops considerably at night. This is a perfect time to cool your house down in the summer. Just opening your windows isn’t effective though.

The best way to cool your house down is to get a fan that sucks air in from outside and blows it into your house. By forcing the temperature down in the morning you can avoid turning on your AC for many hours which will cut your electric bill considerably.

If it doesn’t get super cool at night where you live consider cooling your house down a bit extra in the morning when it is relatively cooler. This stops your AC from working extra hard in the heat of the day.

Key Idea: Use the cool air at night to cool your house down without the AC.

Tip 3: Use Cheap or Free Sources of Heat

You might wonder how heating your house can be free. Depending on where you live, firewood might be very abundant. Some people have so much firewood they are willing give it away if you will load it and haul it.

This will cost extra upfront to put in a fireplace, but after that, your heating costs will drop dramatically. It just takes a bit of work to keep it burning.

If that isn’t an option, consider using a pellet stove*. This is a highly efficient form of heating that burns smokeless wood pellets. The pellets are discounted when you buy them in bulk and it is very effective at heating a single large space.

So if you stay in just one room most of the day, using a pellet stove to heat that area while leaving the other areas colder will keep your heating cost down.

Solution: Use different forms of heating like wood and pellet stoves.

Cut Your Bill by 100% or More

Once you have reduced your electricity bill as much as possible through better efficiency, less waste, optimized appliances, cheap or free heating and cooling, and just being conscious of how much energy you are using, it is time to get rid of your electricity bill entirely.

New sources of clean energy, such as solar and wind can do this.

A solar or wind salesperson, however, may not tell you the full truth about these, so make sure you are informed before purchasing them.

Tip 1: Choose the Right Type of Renewable Energy

If renewable energy is available in your area it can be a powerful way to cut your electric bill, but not all renewable energy is created equal.

There seems to be a solar power company in every town of decent size these days. That doesn’t mean that solar is right for you. It depends on how much direct sunlight you can get for how long, etc. My house was surrounded by trees for a long time, so it was not a great place for solar.

Wind energy is only good for extremely windy places. If your trees don’t bend funkily because of the wind, it is probably not an effective source of energy.

If neither of those work for you, get creative. Is hydro-electric allowed? Do you have access to geothermal? Find a way to make clean energy if you can.

Key Idea: Make sure you get the right type of energy, don’t choose solar just because a salesperson said so.

Tip 2: Lower Energy Use is Better

Even with better technology, these renewable energy sources aren’t able to produce very much power compared to your power company. That means it is better to use less power (meaning do everything you can to reduce your electricity bill) so you need less solar panels or wind turbines or whatever to make power for you.

On top of this, many places allow you to sell the power you produce back to the power companies if you don’t use it. This can turn your home into an asset and give you a negative electricity bill. But you have to use less energy.

Key Idea: Follow all of the previous tips in this post before getting a renewable energy source.

Tip 3: Weigh the Cost

Buying a renewable source of energy does cost money. If you can’t buy it up front you can often finance at about the same amount that your electricity bill costs each month.

This is really helpful, but it isn’t always the cheaper option. It can take up to twenty years to pay off the installation of a renewable energy source, and at that point they may break, which means you’ll have to buy a new one and start over.

Make sure that it is cost effective to purchase the renewable energy source if your main priority is to save money.

Also, you will be told that there are major government rebates to install these sources of energy. While that may be true, there are a lot of hoops to jump through (because it is from the government) and it still might not make economic sense to install them even after you get the rebate. Just make sure the math works for renewable energy to be a positive on your balance sheet.

Key Idea: Only install a renewable energy source if it will be about equal to or cheaper than your average electric bill cost over the next twenty years.

Cutting Your Electric Bill = Savings

There are few things in your immediate control when it comes to your finances. Housing, a car payment, the cost of insurance, all of those are hard to change immediately. But you can start changing your electricity bill now.

Start with the simple things and then add more and more of these tips over time to save as much as you can.

To help you get started, download the Lower Your Electricity Bill Checklist.

What are some ways you’ve decreased your electric bill? What renewable energy sources have I missed? Tell me about it in the comments below.

A Few More Helpful Tips
  • Have “cooking seasons”–use your oven more for the meals you love in the winter and use the outside grill more in the summer.
  • Get an energy audit–many power companies do this for free.
  • Check your insulation, doors, and windows each spring or fall since the least amount of energy is lost keeping your doors and windows open.
  • Use the cheapest energy source you have access to for heating and cooling (compare gas vs electric prices for example).
  • Wrap your hot water heater in a large blanket to help it maintain heat (where else will you store that blanket anyway?).
  • Hang dry your clothes (the cost of a drying rack* will pay itself back in a month or two).

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Find a list of all the definitions used on this blog here.

Asset: Things that put money into your pocket every month (or year). Sometimes equity in your house is also included as an asset, but I prefer not to include it. A car loses value every year (depreciates) so it is NOT an asset.

Balance Sheet: A place to keep track of how much money is coming in and how much money is going out to make sure that you are not spending more money than you make. Assets, liabilities, and savings are included as part of this accounting.

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