What a flat really costs per month: adding up the utilities

What goes into the cost of a home

• Rent or the mortgage payment. The largest and most visible part; everybody remembers it.
• Electricity, water (cold and hot separately), gas, heating. What is usually called “the utilities”. Each service has its own bill, its own amount and its own tariff, which changes when it suits the supplier, not you.
• Rubbish collection, maintenance of the building and the grounds, the lift, the intercom. Small amounts that get forgotten, but that come every month and together make a noticeable figure.
• Internet, television, security. Formally not utilities, but without the internet a flat today is not a flat, so it belongs in the price of the home.
• Home insurance, if you have it. Once a year — so in no single month is it “there”.
• What almost everyone forgets: repairs and appliances. The boiler broke, a pipe leaked, the fridge needs replacing. In an ordinary month there is none of this, but over a year there almost always is, and often it costs more than a whole winter of heating put together.

How to build the figure for a year

1. 1Take the bills for twelve months. Not one and not three — a whole year. In winter heating doubles the bill, in summer the air conditioner pushes up the electricity, and no single month shows the truth. If you did not keep the bills, the payment history is in the bank’s app or on the supplier’s website.
2. 2Break each one down by service: how much for electricity, how much for water, how much for gas. Not one overall amount but line by line — otherwise later on you will not see what exactly is growing.
3. 3For each service add up the year and divide by twelve. That is the average monthly price of that service — the figure worth keeping in your head, rather than “this month it came to three thousand”.
4. 4Add the rent or mortgage, the internet, the insurance, and what you spent on repairs over the year divided by twelve. The sum is the real price of your home per month. In most families it is thirty to fifty per cent higher than the one they named before counting.

Why record meter readings, not just amounts

The electricity bill grew from eight hundred to one thousand two hundred. There are two completely different explanations: either you started using more electricity, or the tariff went up. The amount on the bill does not say which is right. The meter readings do: if the kilowatt-hours are the same and the amount is larger — it is the tariff; if there are more kilowatt-hours — it is you.

This matters because the answers are different. There is nothing to be done about a tariff, and worrying about it is pointless. But a rise in consumption has a cause — a new heater, an old fridge, a boiler that heats water round the clock — and that cause can be found and removed.

So once a month, on the same day, write down the readings of all your meters. It takes a minute, and a year later you have a picture that is in no bill: how much you consume month by month, and whether it is changing. Sometimes that picture also shows a supplier’s mistake — a charge based on readings you never had.

Billed and paid are not the same thing

A utility debt appears quietly. One month you paid less than the full amount because there was no money; the next you forgot one of the bills; the third you got mixed up and paid twice for water and not once for gas. Each mistake on its own is small, but six months later the bill says “arrears”, and it is unclear where they came from.

So for each service it is worth keeping two figures: how much was billed and how much you paid. The difference between them is your debt or your overpayment, and it should be close to zero. If it is growing — you are not paying everything, and it is better to find that out now rather than from a letter from the supplier.

This applies especially to services that are paid for by meter readings with a long delay — heating, hot water. There the charge for December arrives in January, and without records it is easy to pay “for last month” twice, or not at all.

Where utilities can really be saved on

• Heating and hot water are sixty to seventy per cent of the winter bill in most flats. This is where every per cent of saving carries weight: a degree lower on the thermostat, closed windows, a boiler that does not heat water at night — all of it shows on the bill. Saving on lighting while an electric heater runs at full power is a waste of effort.
• Electricity — few people gain more than ten per cent. Bulbs have long been efficient, and a television on standby costs pennies. What really consumes is the boiler, the electric hob, the heater, the air conditioner, an old fridge. If you have none of those, there is almost nothing to save on electricity.
• Water — it depends on the meters. If you pay by the standard allowance rather than by the meter, a meter almost always pays for itself within a year. If you pay by the meter, there is a saving to be had, but it is small, and not worth fighting hard for.
• Internet, television, security — a once-a-year review, not a monthly battle. Once a year look at what you are paying for and whether the same provider has a cheaper plan: it often does, it just is not offered to those who already pay more.
• Building maintenance and rubbish collection — almost impossible to influence, and not worth trying. Know it — yes; fight it — no.

If the home is rented

Agree at the very beginning who pays for what, and write it down. “Rent plus utilities” means different things to different people: does the internet count as utilities, who pays for the building’s maintenance, what happens to a debt that was there before you. Anything that is not written down will be an argument a year later.

Record the readings of all the meters on the day you move in — and photograph them. It is the only way not to pay for what the previous tenant used. The same on the day you move out. It seems a trifle until the heating bill arrives for a month you were not yet living there.

Keep all the bills and payment confirmations for at least a year. If the landlord says you did not pay, that is your only argument. The bank’s app has the history, but it does not show what exactly a payment was for — the bill does.

Example: the flat that “cost” twelve thousand

A family rents a two-room flat for twelve thousand and was sure that was what their home cost. They gathered the bills for a year and broke them down by service. Heating — only from October to April, from a thousand to three and a half thousand a month, seventeen thousand for the year. Electricity — from six hundred in summer to one thousand two hundred in winter, ten and a half thousand in all. Water, gas, rubbish, building maintenance — about another twelve thousand a year. Internet — three and a half thousand.

Altogether, utilities plus internet came to forty-three thousand a year, that is, three thousand six hundred a month. Plus, over the year, one call-out for a repairman and a new tap — two and a half thousand, another two hundred a month. The real price of the home: fifteen thousand eight hundred, a third more than they had been saying. On an income of forty-five thousand that is thirty-five per cent — right at the upper limit.

The electricity meter readings showed that summer consumption was almost the same as winter — it was an old fridge running without stopping. They replaced it, and the electricity bill fell by a quarter. On heating, as it turned out, there was nothing to influence: it was the tariff.

How much a home “should” cost

The guideline used by almost everyone who counts family budgets: housing together with utilities — no more than a third of income. If it comes out higher, that does not mean moving out tomorrow, but it does mean less is left for everything else than you would like — and that, rather than the coffee, is where the reason hides.

If you have worked out the real price of your home and it came out noticeably higher than you imagined — that is normal; it almost always does. What matters is that now you have a figure rather than a feeling. With a figure something can be done: see which service is growing, whether there is a debt, whether it is time to change the internet plan. With a feeling — nothing.

In FinLad a bill can be photographed, and the amounts land on the right services by themselves; a meter is read from a photo too — once a month, a minute of your time. For each service the app keeps “billed” and “paid”, and the statistics for the flat show the year month by month, as described above. Utilities are part of the Plus plan.