Why You Need To Be Vigilant With Your Utility Bills

My electricity bill just arrived, and it was lower than it has been for a while. That's probably a combination of the fact that we went away for 10 days, as well as the fact that my AC/heater combination has been broken, so we haven't used it, and the difference to the bill was enormous. Even one appliance can make a huge difference to your utility bills. Learn more about them with this post below.

Your household or office runs on electricity, water, and gas, which are the three major utility bills you pay. When our monthly bills come in we know that we pay according to our usage, but we often don’t understand much further than that. You’ll probably see a lot of numbers and jargon on bills that you might not be familiar with.

You need to understand better how these utility bills are calculated, so when monthly bills come in, you’re not baffled by what’s going on.


Electrical bills show us the total amount that has been used throughout any given month. This includes standing charges, VAT, and discounts. Take the time to learn how to read the electricity meter in your home, as well as how much energy each appliance consumes.

If you want to know how much each appliance in your home is costing you in charges, you’d need to do some math.

First, you’ll want to know the appliance watts, the average daily use of an appliance, and the price you pay per kilowatt-hour (kWh). When you have that information:

  • Multiply the wattage of an appliance by the number of hours the appliance is used daily
  • Divide by 1000
  • Multiply by your kWh rate

Standing and Unit Charge

For UK residents for instance, there is a standing charge and a unit charge. The standing charge is a fixed amount you pay regardless of how much power you use. The unit charge is the amount you are charged according to your usage.

These two charges are related, and it can get confusing if you own more than one property as you might be paying more than what you actually use. Some suppliers do not oblige you to pay the standing charge, but that usually means paying more for a kilowatt of usage. It’s important to learn about these charges because it will make a difference in your billing. For instance, if you live in a residence most of the year, paying a standing charge makes sense as this reduces the unit cost of your energy, which means paying less. However, if you own a second home or your residence is left vacant for long periods, it’s probably not in your best interest to pay the daily standing charge.


A water bill includes a minimum bill, a volume charge, and the total water used. Where you live also plays a factor in how your bill is calculated with those living in the East end of the UK usually paying more than those who live on the West end.

Households are charged in two different ways: metered and unmetered. With a metered method, you’re charged for the amount of water you use. With an unmetered method, you’re actually being charged for your home’s Rateable Value (RV).

The problem with the latter method is that you’re being charged based on what your home is worth regardless of your water usage. This might or might not work out for you, but it tends to benefit you if you do use a lot of water. You can switch to a metered method if you think you’re paying too much. With the metered method, you pay a fixed charge as well as a volumetric charge.

Your water bill also has two parts. Water charges are what you pay for fresh water out of your taps. Sewage charges are for the water that returns into the system to be treated. The most recent rates were revised in April of 2019 and were raised by £8 a year, onto 2020.


Different gas suppliers will compete with each other to give you the best deal. Most of the time, the price of gas is correlated to the price of oil, so when oil goes up, expect your gas bill to go up as well.

Gas meters give information in cubic feet or meters. The reading is then converted to kilowatt. The number of kWh is then multiplied by the price per kilowatt-hour as noted on your gas bill.

It’s important to keep a close eye on your usage in general, if you’re working towards effectively being vigilant with your utility bills. If you’re paying a lot more than the numbers mentioned at the start of this read, then you can find and compare different suppliers. All individuals must be mindful and prudent in how much they use up energy. For every type of energy we use, there are different, even if small, actions we can do to lower our utility bills. There are several online tools and calculators you can use to help you get an accurate reading of your utility bills.

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal

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