What are utilities and how much should you budget for them?

The most common household utilities include everything you need to run a comfortable home such as electricity, water, gas, internet, and waste pickup—cable TV optional.

Water and sewer

Controlled by your local municipality, the water and sewer system in your apartment refers to the water in your bathroom and kitchen, the sewage system, and water used with appliances like the dishwasher or washing machine. 

Each building has a meter that measures the water usage for the city to bill for the usage. The bill might come to your individual unit or the property owner(s). Many landlords build the cost of the water and sewage bill into the monthly rent, rather than charging the tenants monthly for this utility.

Electricity

Most tenants set up their electricity with the local electric company and pay their electric bills. Your electricity bill can vary according to many factors—most importantly, your usage of appliances, lightbulbs, electric heating and cooling systems, and electronics. 

If you have a window or portable air conditioning unit or a space heater, your electric bill is likely to be higher during the months that see extreme weather. But it can also be affected by inefficient insulation and appliances, so make sure you consult your property owner if you suspect this is the case in your unit.

Gas

While all homes have electricity, not all have gas. Gas might be used to run your water heater or heat your home as well as power a gas stovetop. Like electricity, gas is provided by your local natural gas service and often billed directly to the tenant as usage can vary widely based on household habits, climate, and appliance efficiency.

Trash and recycling

Another common cost covered by property owners is waste removal—often, if you live in a building with many units, you’ll use a shared garbage container. If you’re renting a house or similar stand-alone unit, your landlord may be more likely to ask you to cover your trash removal costs and set up a payment method with the city.

Tenants are usually responsible for paying for at least some utilities, but there are several different possible arrangements for utility costs, including:

• Utilities are included in your rent. That doesn’t mean you don’t pay for them—rather, the landlord has likely calculated an average monthly cost of utilities for your unit and bundled it into the rent. 

• The landlord pays for some utilities, like water and trash, and you pay for others, like electricity and gas. 

• You pay for all utilities. 

Internet, cable, and phone service are also considered utilities, but these are always your responsibility. The exception to this rule of thumb is subletting—in this case, the master lease holder may already have internet and cable in place, and invoice the subletter monthly to cover the bill.

Planning for utilities before you’re moved in can help you plan your yearly budget and avoid surprises. The following factors can affect your utilities cost: 

• Apartment size—how many square feet are you powering, heating, and cooling? 

• Regional weather—do you have mild or extreme seasons?

• Appliances—dishwashers and in-unit laundry are luxurious, but they will also increase your utility cost.

• Light fixtures—Are the fixtures in the unit compatible with energy saving bulbs? Specialty bulbs can run up your power bill.  

Because utilities can vary so much based on location, your arrangement with your landlord, and your individual unit, it’s best to list each utility out and estimate it separately on your budget. You can use a website like numbeo.com to calculate utility estimates in your area.

To set up utilities, find out which providers are in your area via a quick Google search or asking your landlord. Then, either sign up on the utility company website, or via phone by providing your name, address, and other personal information. You can also set up autopay, or opt to receive paper bills in the mail. 

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