With the cost of things With food and shelter still taking a toll on people’s budgets, many American households have had to cut spending on basic necessities over the past year just to keep the lights on in their homes.
That’s according to a recent study from Lending Tree that analyzed U.S. Census Bureau household survey data from August 20, 2024 to September 16, 2024 to determine the percentage of Americans 18 and older who had reduces the expenses needed to pay their energy bill. , kept their home at an unsafe or unhealthy temperature, or were unable to pay the full amount of an energy bill at least once in the previous 12 months.
The study found that more than 34% of respondents said they had to cut or skip some necessary expenses at least once in the past year in order to pay their energy bill.
“Even though inflation has moderated in recent months, life remains extremely expensive, which can make it difficult to pay your bills,” Matt Schulz, LendingTree’s chief credit analyst, said in the report. “Many people have had to make difficult decisions to keep the lights on. For some, that may mean cutting back on some expenses. For others, it may mean finding a side hustle or a second job.”
It’s no surprise that households in poorer states are having a harder time meeting their electricity bills. In Alabama and Mississippi, more than 44% of residents reported having to make sacrifices to pay their utility bill, according to LendingTree. According to the report, eight of the eleven states with the highest percentage of people having difficulty paying their energy bills are in the South.
“Southern states tend to be low-income states, which means every month can be a struggle,” Schulz said. “Add to that that these are also low credit rating states, and the situation becomes more difficult.”
Added to the people’s struggle is the rising cost of public services. On average, in August, Americans spent an average of $185.59 on electricity bills, according to LendingTree, an increase of 2.6% from $180.82 in the same month a year ago. That said, residents in states with the highest energy rates don’t necessarily pay the highest average monthly bills, according to the report, which found notable disparities in energy consumption.
For example, Arizona, which has an average electricity rate of 42.10 cents per kilowatt hour, 14.7 percent lower than the national average of 16.63 cents, still has the second highest average monthly bill , at $254.47, according to the report. Connecticut, which has only the third highest electricity rate at 29.93 cents, or 109.7 percent above the national average, has the highest average monthly bill in the country, 254.47 $.
Schulz expects energy costs and consumption to continue to rise.
“On the one hand, climate change and extreme weather conditions that may arise from this could lead to greater use, both in the heat of summer and in the cold of winter,” he said. “In addition, many utility companies are looking to raise their rates in response to growing demand and other issues, and they are getting what they want in many cases. All of this presents challenges for people on tight budgets. »
