The federal reserve, in an attempt to slow inflation, raised interest rates by 0.75 percent. This is the largest increase since 1994. The central bank is signaling there are more rate increases to come in order to slow down inflation.
This should be seen as a positive move since inflation seems to be affecting every part of our lives. Gas and housing prices are through the roof and now the next issue — utility bills.
Utility bills are expected to rise significantly due to inflation in 2022. This is the latest in a series of price hikes that have affected many different areas of consumers’ lives over the past few years. According to the Bureau of Labor Statistics in its May Consumer Price Index report, electricity is up 12 percent from May of last year, on average. Natural gas prices have increased by 30 percent from a year earlier. While this may not seem like a lot to some people, it will be a significant burden for those who are already struggling financially.
The biggest impact will be felt on electric bills, which are expected to increase by an average of $200 per year. This is due to a combination of factors, including the rising cost of electricity itself and the increased use of air conditioning during the summer months.
Water bills are expected to increase by an average of $50 per year. This is due largely to the rising cost of water treatment and the increased use of water during the summer months.
Finally, gas bills are expected to increase by an average of $100 per year. This is due to the rising cost of natural gas and the increased use of gas-powered appliances during the winter months.
As utilities become more expensive, people will be forced to use less energy, which will lead to a decrease in overall consumption. This is a good thing for the environment, but it will put even more financial strain on families who are already struggling to make ends meet.
How To Prepare For Rising Utility Bills
If you’re concerned about the rising utility bills’ impact to your budget, there are a few things you can do to prepare.
First, try to conserve energy where you can. This includes turning off lights when you leave a room, setting your thermostat a few degrees higher in the summer and lower in the winter, and unplugging appliances when they’re not in use.
Second, make sure you’re getting the best possible rates from your utility providers. This may mean shopping around for a new provider or negotiating a better rate with your current one.
Finally, consider making energy-efficiency improvements to your home. This can be anything from weather-stripping your doors and windows to installing solar panels. These improvements will help you save money on your utility bills in the long run, even if they cost a bit of money upfront.
You Can Weather The Storm
With a little preparation, you can weather the storm of rising utility bills and keep your family’s finances in good shape. Just remember to be smart about your energy use and to shop around for the best possible rates.
What do you think about these rising utility costs? Have you started making any changes in your home to prepare? Let us know in the comments below.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.