Power bills are America's #2 biggest financial stressor—right behind rent
When it comes to household financial stress, it's no surprise that rent or mortgage payments top the list. But what may surprise you is that in a recent survey conducted by Arbor, electricity costs ranked as the second-most stressful household expense, outpacing credit card debt, car payments, and even insurance. In fact, for 62.8% of Americans in the southern U.S., power bills are a major source of financial stress. This is just behind rent/mortgage payments, but it far surpasses other common expenses.
According to the survey, 56% of respondents said that the growing cost of electricity has made it harder for them to balance their monthly budget. This financial strain is particularly worrying when 41.1% of people are already losing sleep over their power bills. When people are worried about how to pay their bills each month, it adds to the mental burden of dealing with financial pressures.
Rising electricity costs have made power bills a more significant part of the average American's financial burden. In fact, electricity costs now rank just behind rent/mortgage payments, outpacing expenses like credit card debt, car payments, and insurance. With the cost of living increasing and wages not keeping up, this escalating utility cost is creating an environment of financial instability.
Despite efforts to cut back on usage (56% of respondents reported reducing energy consumption), 50.9% of people say they feel powerless to control their utility rates. And with rising rates and unpredictable costs, many consumers feel they have no way to regain control over their energy bills.
So, what can be done to alleviate the financial strain?
- Lock in Fixed Rates: In many areas, consumers have the option to shop for energy plans and lock in fixed rates. By switching to a fixed-rate plan, you can avoid unexpected price hikes, giving you more control over your electricity costs.
- Energy Efficiency Upgrades: While investing in energy-efficient appliances might not be affordable for everyone, many people can make simple improvements to reduce energy consumption. The majority (56%) of respondents reported cutting back on usage to cope with high bills, and low-cost fixes like weatherizing your home or switching to energy-efficient lighting can make a big difference.
- Explore Payment Assistance: Many utilities offer payment plans or budget billing options that can help flatten out the costs of energy consumption across the year. Additionally, some states provide energy assistance programs for low-income households.
Rising electricity costs have become a growing financial burden, and many Americans are struggling to keep up. Taking proactive steps like switching to fixed-rate plans, making energy-efficient upgrades, and seeking assistance programs can help manage this financial stress.
