The Ultimate Guide to Saving Money on Utilities These basic steps should save you several hundred dollars a year or more.

Utilities are a practical necessity, but they occupy a massive line on your monthly budget. The typical American family spends more than $2,000 a year on utility bills, including electricity, water and sewage and natural gas -- and depending on where you live, you might spend even more than that. If you can manage to cut those costs by just 25 percent, you could be saving money on utilities. This includes savings of more than $500 a year. And, if you cut them by 50 percent, you could save more than $1,000.

Saving money on utilities

So, what steps can you take toward saving money on utilities? There are some general strategies you can use for all three main types of utilities. Plus, there are specific lifestyle habits and strategies you can use for each type of utility.

Monitoring

The first key to success is consistently monitoring your usage (and how much you spend every month). Only with these numbers in front of you will you be able to determine your best and worst categories. This will also help determine whether your new strategies directed at saving money on utilities are working.

Upgrading your appliances

You can start by upgrading your appliances. After all, your appliances are the conduits through which you use the majority of your utilities.

• Purchase newer, energy-efficient models. Energy-efficient heaters, air conditioning units, refrigerators and other appliances might cost a bit of money upfront (usually hundreds to thousands of dollars). Over the course of years, you'll easily make up for those costs with utility bill savings. Every year, appliances get more efficient. If any of your appliances are more than a decade old, it's time to replace them.
• Install low-flow showerheads and faucet heads. You can save water by installing low-flow showerheads and faucet heads throughout your house. This is especially true if the house is more than a decade old. You might be turned off at the term "low flow," but these heads are designed to maximize pressure. You probably won't tell the difference, but you'll use far less water over time.
• Adjust your water heater thermostat. Your water heater relies on natural gas to keep the water at a steady temperature. Many homeowners don't know you can change that maximum temperature. The factory default setting for most models is 140 degrees F, but you'll probably never need more than 120 degrees. That drop in temperature can save you significant money every month.

Changing your home

Next, you can make upgrades to your home. Some of these can be costly, so work with whatever you can afford:

• Invest in new windows. New windows can be expensive, costing a few thousand dollars for a full replacement for the average home. They can make a dramatic difference in the energy efficiency of your home. New windows are better insulated. This means your house will stay cooler in summer and warmer in winter. Your heating and cooling system won't need to work nearly as hard, so you'll save money.
• Install more insulation. If there are any areas of your house that aren't insulated or are poorly insulated, consider installing more, better insulation. Even one layer of standard-grade insulation can make a major difference in heating and cooling system efficiency.
• Get a smart thermostat. Technology can almost always save you money in the long run. Investing in a smart thermostat will give you more control over the temperature of your home. This includes throughout the day when you aren't around to adjust it manually. That way, you can keep your home at a reasonable temperature all the time without paying to heat or cool your home when you aren't around.

Cleaning your house

Thankfully, this one won't cost you much money -- just an hour or two of your time on a weekend. Keeping your house free from dust, dirt, animal fur and other contaminates increases airflow and reduces the burden of debris on your appliances.

It's also a good idea to clean your appliances regularly. For example, clean out the coils on your refrigerator so it can continue to reach its ideal temperature without expending more energy than necessary. In general, the cleaner they are, the more efficiently they're going to run.

Make sure the ductwork in your home gets cleaned out at least once a year. Dust and dirt can accumulate here and make your heating and cooling system far less efficient (not to mention adding contaminants to the air).

Using natural light

Natural light plays a powerful role in the temperature of your house; if you let too much light in during the summer, the inside of your house will heat up, while too much shade in the winter can make your house even colder. Use outdoor installations like trees and indoor installations like shades to carefully control how and where natural light hits your house; it's a free way to cool or warm your home, depending on the season.

Conducting ongoing maintenance

Regular maintenance is one of the best strategies for saving money on utilities. There are several areas you'll need to pay attention to:

• Replace parts and make repairs. Over time, the parts on your appliances, especially those that use multiple utilities at once (like pools and spas), are going to degrade. It's important to replace those parts as soon as possible so your appliance can continue to operate efficiently. If you let a repair go unattended for too long, your efficiency will drop, and you'll end up paying more than you have to.
• Replace your filters. The single best way to maintain your home and save money on utilities is to replace the filters on your heating and/or air conditioning units regularly (i.e., every three months, or even more often for high-use areas). These filters keep your appliances free from dirt and debris and ensure they continue operating smoothly.
• Check for leaks. Plumbing leaks can be hard to detect, so it's important to make a manual check for any leaks in your system. Check your toilets, showers, faucets and other plumbing related appliances for any leaks; even a slow drip can add up to cost you far more on your water bills every month. If you can, get a permanent fix rather than relying on duct tape or other temporary fixes.

Saving electricity

These additional tactics can help with saving money on utilities that involve electricity:

• Cook with the stove or oven, rather than the microwave. Your microwave uses more in electricity than your stove will in natural gas. When possible, rely on your oven or stove to cook your food.
• Operate your appliances wisely. In the summer, your appliances are going to generate more heat, making your air conditioner work harder. Try using your stove, oven and other heat-generating appliances at night, where they won't have as much of an impact.
• Rely on fans in the summer. Instead of running the air conditioner constantly, try relying on fans and open windows. It will still help you stay cool but without the high energy demands.
• Adjust your refrigerator and freezer temperature. Take a moment to check your refrigerator and freezer temperature settings. Your refrigerator should be at 40 degrees F or less, while your freezer should be zero degrees F or less for food safety. If they're too far below those figures, you're wasting money by cooling them excessively.

Reducing water and sewage costs

If you're more concerned about water and sewage costs, these strategies can help you:

• Time your showers. Pay attention to how long you take showers. It's probably longer than you realize. Reducing that time by just a few minutes a day can help you save several gallons of water every month.
• Utilize the full capacity of your washing appliances. When using a washing machine or dishwasher, try to load the machine to its maximum capacity. That way, you won't waste any water with an incomplete load.
• Avoid excessive watering. It's tempting to saturate your lawn to make it brighter, greener, and healthier. However, the excessive watering can get expensive fast. Keep your watering to a minimum, or rely on grass and plants that can get by with natural rainfall levels.

Saving natural gas

Finally, if you want to save more on natural gas, try these strategies:

• Cook things in rapid succession. If you're going to use the stove or oven, try cooking things simultaneously, or in rapid succession to make use of the heat you're already generating. There's no use bringing the appliance up to temperature twice.
• Manage your hot water usage. Try not to use hot water unnecessarily. For example, there's no added benefit to using hot water over cold water when washing dishes or doing the laundry, so use cold water and save some heat.
• Wear a sweater. In the winter, rely on sweaters, blankets and other types of layering to keep yourself warm. It's cost-efficient, always available and can help you keep the thermostat a few degrees lower than usual.

In saving money on utilities, you don't have to go cold or adopt unreasonable lifestyle habits. These basic steps should save you several hundred dollars a year or more. On top of that, you'll be helping the environment since you'll be creating less pollution and wasting less natural resources. Try putting these strategies for saving money on utilities to work in your household, but don't get too restrictive. There's no need to make yourself uncomfortable for the sole sake of saving a few dollars.

(By Max Palmer)