In recent years, the cost of electricity generation in Australia has skyrocketed. In a country heavily dependent on electricity for cooling and heating, this is a real problem for a lot of Australian households.
In 2017, the average Australian household spent anywhere from $1600 to $1900 per year on electricity, depending on the state you’re living in – that’s a fair bit of money by anyone’s standards.
In addition, as we become more environmentally conscious, there is a moral imperative as well – reducing our electricity consumption isn’t just great for our wallets, it could help to reduce the carbon footprint we make.
There are so many different tips and tricks out there to reducing your electricity bill – and we’ve gone ahead and collated the best of them here. Learn how you can save hundreds of dollars a year, without sacrificing your quality of life.
Figure out what you’re spending and when
Establishing accurate metrics for improvement is the first step to saving big. Figure out what your average monthly electricity bill is throughout the year, and you’ll have a good insight into how your household uses electricity. Spending more in winter? Time to figure out how to cut back on heating. More in summer? Air conditioning is probably the culprit for your utility bill woes.
Finally, make sure you know the schedule on which you pay your power bills. Some utilities companies charge monthly, some charge quarterly. Make sure your budget allows you to pay these bills on time – most utilities companies will charge additional fees for late payment, and some even offer a discount for on-time payments.
Budgeting for your electricity bill
Once you have a good idea of the ‘how much’, it’s time to figure out the ‘how’. Budgeting is pretty simple once you have a good idea of your expenses, so if you haven’t already, now is the time to create a comprehensive household budget.
Think about your money not as being one big ‘pile of cash’ but a lot of smaller piles, each with a purpose and a goal. The first aspect to any effective household budget is dividing up your expenses into three classes:
- Fixed ongoing expenses, like rent, mortgage and loan repayments, insurance, and bills that don’t change month to month (i.e. Netflix, internet)
- Variable ongoing expenses, such as utilities, car petrol, etc – this is where your power bill comes in. Variable expenses change depending on a number of factors, so understanding these factors is crucial (that’s why knowing when and where you use electricity is so important!).
- Discretionary or occasional expenses – this is the pile that everything else falls into, including going out, paying for car repairs or vet bills, buying fun things, and so forth.
Once you’ve figured out what these expenses are, it’s time to start allocating funds towards them. A lot of people also find it helpful to think about costs in terms of weeks, rather than months, so average out your income and repayments towards into weekly increments.
For each week, make sure that you prioritise the ‘necessities’ – food, rent, electricity, etc – and try and leave a little bit for savings.
Using this technique, you’ll be able to make sure that you always have enough money to cover your electricity bill, and hopefully, a little left over to go on a holiday or buy yourself something you want – treat yo’ self!
How can I save on my electricity bill?
There are many different strategies for saving money on your electricity bill, but they all essentially boil down to one of two things – reducing your consumption, or reducing the price of your electricity.
Reducing your electricity consumption is often the most straightforward way to reduce the size of your bill – simple things like:
- Reduce your usage of air conditioning.
- Replace your old appliances with more energy efficient ones.
- Turn off lights when you’re not in the room (and not just when leaving the house).
In fact, did you know that LED light bulbs have become quite popular, and the average house stands to save up to $650 over ten years just by switching to LED bulbs alone? This might not sound like a great deal, but this type of incremental reduction will ultimately be the quickest way to cut down on your power bill.
For the more ambitious, there is always the option of installing solar panels on your house. Solar panels are a pretty significant outright cost, but there are a number of government rebates available, depending on the state you live in, and they can pay for themselves in as little as two to three years, depending on the size of your installation.
Reducing your electricity bill for financial health
In terms of reducing the actual cost of your electricity, there are a few options available to you. Obviously, taking the time to shop around for the most competitive power supplier is a must – you may be able to save hundreds of dollars a year just by switching to a better service provider.
Additionally, there are a number of tax rebates available for small business owners or those who work from home – it may be possible to claim some or even all of your power bill as a tax refund, depending on the amount of time that you spend working from home.
There are so many ways you can make small changes to reduce your electricity bill. In the long run with a little bit of effort, it will be a great move for your finances and a great move for our planet!
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