Budgeting: How to save money on your electric bill: what each change is worth

What's the average electric bill?

$142.26 a month in 2024 for the average US home, which used 863 kWh at 16.48 cents per kWh, according to the Energy Information Administration.

Prices have gone up since. The average residential price was 18.16 cents per kWh in August 2026, up 3.4% from a year earlier, in the EIA's Electric Power Monthly. At that price, the same 863 kWh costs about $157.

Where you live matters more than almost anything you do at home:

Texas and Florida homes use twice what California homes do, mostly on air conditioning, and pay about the same. Hawaii uses the least and pays the most. Your bill is usage times price, and the two halves need different fixes.

How do you read your electric bill?

Find three numbers: the kWh you used, the price per kWh, and the fixed monthly charge.

The fixed charge is what you pay to be connected, whatever you use. The kWh and the price make up the rest. Most bills also show the last 12 months of use as a small chart. That chart is the most useful thing on the page: the tall months are when heating or air conditioning ran most, and they're where savings come from.

What saves the most money on an electric bill?

Heating and cooling. Setting your thermostat back while you're asleep or out can cut those costs by as much as 10%, according to the Department of Energy's Energy Saver guidance.

In winter, the DOE suggests keeping the thermostat at the lowest comfortable temperature while you're awake and setting it back further at night. It puts the saving at about 1% on heating for each 1°F you set it back over eight hours. Set back 7°F overnight and that's about 7%.

In summer, set it to the highest comfortable temperature, and keep the system running when you're out rather than switching it off, to avoid moisture build-up. A programmable or smart thermostat does the setbacks without you having to remember.

Two cheaper fixes help the system do less work: clean or replace the filter during the months it runs most, and close curtains on hot afternoons and open them on sunny winter days.

Do LED bulbs make a difference?

Yes, if you still have incandescent or halogen bulbs. LEDs use up to 90% less energy and last up to 25 times longer than incandescent bulbs, according to the DOE.

A worked example: a 60-watt incandescent bulb on for three hours a day uses 5.4 kWh a month, about $0.98 at August 2026's average price. An LED using 90% less costs about $0.10. That's $0.88 a month per bulb. Across 15 bulbs, it's about $13 a month, or $158 a year. Start with the bulbs that are on longest: kitchen, living room, outside lights.

If your home already has LEDs, this one's done. Go back to heating and cooling.

What else lowers the bill?

Smaller changes add up, especially in homes with older appliances:

• Wash clothes in cold water and run full loads in the washer and dishwasher.
• Air-dry when you can. The dryer is one of the bigger appliances in most homes.
• Switch off standby power at the wall for TVs, consoles and chargers you're not using.
• Check the fridge and freezer seals. A door that doesn't close tightly runs the compressor all day.

Can you pay less for the same electricity?

Sometimes. Ask your utility about a time-of-use plan, which charges less at night and more at peak times, if you can shift laundry and dishwashing later. In states with retail choice, compare suppliers' rates per kWh, not the advertised headline.

If the bill is a struggle, the federal Low Income Home Energy Assistance Program helps eligible households with heating and cooling costs, and many utilities have hardship programs of their own.

How do you budget for an electric bill that changes every month?

Budget the yearly average every month, not the bill you got last month.

Add up the last 12 bills and divide by 12. If the total was 1,800, budget 150 a month. In a cheap spring month, the 40 you didn't spend goes into a separate pot. In January or August, the extra comes out of it. Many utilities offer budget billing, which does the same thing for you: a fixed monthly charge, settled once a year.

Wealtie's bill tracker logs recurring transactions on their due date, so a fixed budget-billing amount appears without you entering it; the Free plan includes one. Add the bill to your monthly budget and Budget Health warns you mid-month if your spending pace will take you over. For the bigger yearly costs that don't arrive monthly, a sinking fund works the same way as the averaging above.