The Federal Reserve, in an effort to slow inflation, raised interest rates by 0.75 percent. This is the largest increase since 1994. The central bank indicates that more price increases are coming in order to slow inflation.
This should be seen as a positive move as inflation seems to affect every part of our lives. Gas prices and housing have crossed the ceiling and now the next release – utility bills.
Utility bills are expected to rise significantly due to inflation in 2022. This is the latest in a series of price increases 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 compared to May last year, on average. Natural gas prices are up 30 percent from the previous year. While this may not seem like much to some people, it will be a huge burden for those who are already struggling financially.
The biggest impact will be on electricity bills, which are expected to increase by an average of $200 per year. This is due to a combination of factors, including the higher cost of electricity itself and the increased use of air conditioning during the summer months.
Water bills are expected to increase at the rate of $50 per year. This is largely due to the higher cost of water treatment and increased water use during the summer months.
Finally, gas bills are expected to rise at a rate of $100 per year. This is due to the higher cost of natural gas and the increased use of gas-powered appliances during the winter months.
As the cost of utilities rises, people will have to use less energy, which will lead to a decrease in overall consumption. This is good for the environment, but it will put more financial pressure on families who are already struggling to make ends meet.
How do you prepare for high utility bills?
If you’re concerned about the impact of rising utility bills on your budget, there are a few things you can do to prepare.
First, try to conserve energy where you can. This includes turning off the lights when you leave the 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 get the best possible rates from the service providers. This could mean shopping for a new provider or negotiating a better price with your current provider.
Finally, consider making improvements to the energy efficiency of your home. This can be anything from stripping doors and windows from the weather to installing solar panels. These improvements will help you save money on your utility bills in the long run, even if it costs a little money up front.
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 tip-top shape. Just remember to be smart about your energy use and shop for the best possible prices.
What do you think about the rising costs of utilities? Have you started making any changes in your home to get ready? Let us know in the comments below.
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Tamilla MacDonald has worked as a financial advisor to the Army for 13 years. She has taught personal finance classes in every subject from credit, to life insurance, as well as all other aspects of financial management. Ms. MacDonald is an AFCPE certified financial advisor who has helped her clients achieve their short and long term financial goals.