How to Measure Savings on Utilities

One of my consistent messages is to save money and invest the savings into income-producing assets. But when you are saving on utilities, how do you know the amount?

Utilities can be tricky. Let’s say it’s your cell phone. You likely pay the same amount each month. If you change your plan that lowers your regular monthly bill, that’s an easy one. If it’s a $10/month savings, you add $10 to your monthly transfer to your investment account.

But what about electricity or gas?

What I do is track my monthly billing, then compare the bills for the current month to the same month one year and two years ago. If in the current year I ended up saving $20 on the monthly bill, I will add that amount as a one-time transfer to my investment fund. Last year’s winter was exceptionally mild, so I realize that this year could be quite different. I will still work to keep the house comfortable without relying excessively on the heater.

To keep down the paper clutter, I keep a simple notebook listing the utility, the months and the usage/cost.



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