1 in 6 American households are behind on their utility bills. Here’s what to do if you’re one of them
Costs are rising and people are struggling to keep up.
- As heat waves hit parts of the country, rising costs are leaving some families unable to pay their bills.
- If you’re late, speak to your provider first to see what support is available.
- Be proactive and try to find a solution before your power goes off.
It feels like our finances have been slammed from all directions over the last few years. Food, gas, and utility costs are all skyrocketing, and wages are not rising at the same pace. The economic impact of the pandemic was followed by sky-high inflation and insane gas prices.
The result? Americans have a hard time paying their bills. According to the National Energy Assistance Directors Association, over 20 million households are behind on their electricity bills. That’s one in six households grappling with fears of being cut off from electricity as a heatwave sweeps parts of the country.
Four steps to take when you can’t pay your utility bills
If you don’t have enough in the bank to cover your utility bills, you’re not alone. As tempting as it may be to ignore the problem and hope it goes away, the sooner you take action, the better. If you get disconnected, not only will you be without power, but you will also have to pay an additional reconnection fee.
1. Talk to your provider
Make your energy supplier your first point of contact. Find out what support they can offer and if they have programs for people in your situation. You may be able to agree on some type of payment plan or qualify for additional support. These types of calls can be stressful, but try to remain calm, be polite, and emphasize your intent to pay. You’re more likely to get a good result if the person on the other end of the phone is on your side.
2. Search for help
The main source of energy bill support is LIHEAP, the energy assistance program for low-income households. Visit the website or call the National Energy Assistance Referral (NEAR) Hotline at 1-866-674-6327 to find out what assistance is available in your state and how you qualify.
Another potential source of support is United Way, which you can reach by dialing 211. The 211 network helps people who are struggling to pay their bills, groceries or housing expenses. It’s also worth looking out for local charities and NGOs, such as B. local churches to keep an eye out, the Salvation Army or state social services. It’s not always easy to ask for help, but if that support helps you keep the air conditioner running, it might be worth it.
3. Understand your government rules and protections
Every state is different, so it’s good to know what protections are in place in your area. Some states do not allow utility companies to unplug people during the extreme heat of summer or the cold of winter. Others have special provisions for the elderly or people with disabilities. Find out whether there are any measures or programs in your state that could apply to you. Your state Public Utilities Commission (PUC) is a good place to start.
4. Lower your energy consumption
Find out whether your energy supplier offers free advice on energy saving. Many do this and it can drastically reduce your bill. Some of the actions you could take to reduce your consumption this summer are:
- Increase your thermostat. Every degree more could reduce your energy consumption by 1% to 3%.
- Leave the blinds closed to keep the worst of the sun out. Covering your windows can significantly lower the temperature inside.
- Do household chores, like doing laundry, off-peak. Many states have different rates for peak and off-peak hours. So if you can change your consumption times, you can reduce costs.
- Wash clothes in cold water. Not only can you save some money on your electricity bill, but a cold wash can also mean your clothes last longer and the colors don’t fade as quickly.
- Unplug devices at night. Leaving your television and other electronic devices on standby consumes energy even when you are not using them. Turn them off at the plug.
Minimizing the damage caused by unpaid bills
There’s no easy way to conjure up money when you’re barely making ends meet. If you’re struggling to pay your utility bills, there’s a good chance you’re struggling with other expenses as well. Prioritize the most urgent payments like groceries, utilities, and housing, and cut back on all nonessential expenses. You can try a budgeting app to see if there are areas where you can shave a few bucks off your monthly expenses.
Missing payments can affect your credit score and make it harder to borrow money in the future. Still, try not to use your credit card to cover shortfalls, as this could lead to more problems later. Rising interest rates mean this is not a good time to take on high-yield debt. It may feel like there aren’t enough hours in the day. But if there’s an opportunity to take on extra work to bring in more money, it could help get you back on track.
Don’t be afraid to ask for help. See what assistance is available in your state and what assistance you might qualify for. Finally, make sure all creditors understand your situation. These are extraordinary times and the more you can do to proactively manage the issue the better.
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