Nearly a Third of Americans Cut Back or Skip Expenses to Pay Utility Bills

After a sweltering summer for many, Americans in some regions are bracing for a harsh winter. With intense temperatures, comfort may be top of mind — but adjusting the thermostat comes at a cost.

In fact, nearly a third of Americans say they’ve cut back or skipped basic expenses like medicine or food to pay an energy bill in the last 12 months, according to the latest LendingTree study. Here’s what else we found.

Key findings

• In the past 12 months, nearly a third — 32.3% — of Americans say they’ve cut back or skipped necessary expenses at least once to pay for utilities. Meanwhile, 21.2% say they’ve been unable to pay part or all of their energy bill in the same period. Those are slight changes from the 33.9% who reported cutting back and the 23.1% who couldn’t pay an energy bill last year.
• Louisiana (44.8%) has the highest rate of residents who reported cutting back or skipping necessary expenses to pay their energy bills. Mississippi (42.7%) and Oklahoma (39.7%) rank second and third.
• Vermont has the highest average annual household spend on energy at $1,818. Despite this, Vermont residents are the second least likely to cut back or skip necessary expenses to pay their energy bills (22.6%). After Vermont, Connecticut ($1,778) and Alaska ($1,708) residents spend the most annually on energy. Meanwhile, Utah ($751), Nevada ($872) and Washington ($881) have the lowest annual energy costs.
• Electricity costs are not the be-all and end-all of energy costs. Hawaii has the most expensive electricity in the country, costing $41.74 per kilowatt-hour, but pleasant year-round temperatures lower the cost. Meanwhile, the average in Vermont (a state known for harsh winters and warm or muggy summers) costs $21.00 per kilowatt-hour.

32.3% of Americans forgo basic expenses to pay energy bills

After another record-breaking summer of high temperatures, many Americans may be paying the price (literally) via their air conditioners. Over the past 12 months, 32.3% of Americans say they’ve cut back or skipped basic expenses like medicine or food at least once to pay their utility bills. In that same period, 21.2% say they’ve been unable to pay part or all of their energy bill.

LendingTree chief credit analyst Matt Schulz says high prices everywhere likely play a role here.

“Even though inflation may have peaked, it certainly hasn’t gone away,” he says. “That means that the average household’s financial margin for error is getting smaller and smaller. When that happens, bigger-than-expected monthly bills can cause a major issue. For example, sky-high utility bills in the scorching heat of the summer or the frigid cold of the winter can cause families to make some tough decisions.”

How energy costs have impacted U.S. households over the past 12 months

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey covering July 26, 2023, through Aug. 7, 2023.

Still, those potentially high bills were at the forefront of some Americans’ minds. Rather than heating or cooling their homes to a comfortable degree, 20.5% of Americans say they kept their homes at unsafe or unhealthy temperatures.

When we did this analysis last year, we found that 33.9% of Americans had to cut back on basic expenses to afford their bills and 23.1% couldn’t pay part or all of an energy bill — slightly higher than this year. Meanwhile, 20.8% kept their homes at unsafe temperatures last year.

By race, Black Americans most likely to not be able to pay part or all of their energy bills

Nearly 4 in 10 (38.3%) Black Americans say they couldn’t pay part or all of their energy bills — the highest by race — while 32.9% of Americans who identify as two or more races say similarly. Americans identifying as two or more races are most likely to say they had to reduce or skip basic expenses to pay their bills at 47.9%. That’s followed by Hispanic or Latino Americans (44.1%).

How energy costs have impacted U.S. households over past 12 months (by race)

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey covering July 26, 2023, through Aug. 7, 2023.

Meanwhile, 57.1% of Americans who’ve lost employment income in the past four weeks at the time of the survey, 54.0% of Americans earning less than $25,000 and 53.5% of Americans whose highest education is less than a high school degree say they forwent basic expenses to pay their utilities — the highest of the demographics analyzed.

44.8% of Louisiana residents forgo basic expenses to pay energy bills — here’s how other states stack up

By state, Louisiana has the highest rate of residents who reported cutting back or skipping necessary expenses to pay their energy bills at 44.8%. High summer temperatures likely drove up energy bills in the state: According to the National Weather Service (NWS), summer 2023 was the hottest on record for much of the state.

Following that, Mississippi (42.7%) has the next highest rate of residents who cut back on necessary expenses to pay a utility bill. Like Louisiana, Mississippi also had a hot summer this year, reaching its warmest temperatures on record for the January-through-August period, according to the National Oceanic and Atmospheric Administration (NOAA).

Oklahoma rounds out the top three at 39.7%. While Oklahoma didn’t break any temperature records this summer, it’s worth noting that summers are typically unforgiving in the state. In fact, residents in some areas saw temperatures as high as 109 degrees Fahrenheit in July, as recorded by the Oklahoma Monthly Climate Summary.

Where residents are most likely to reduce or skip basic expenses to afford energy bill

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey covering July 26, 2023, through Aug. 7, 2023.

The three states highlighted before the above chart are also among the five states with the highest percentage of households that kept their home at a temperature that felt unsafe or unhealthy, though California ranks first here at 29.5%. Lack of air conditioning may be to blame here. According to the Energy Information Administration (EIA) via the Washington Post, the Pacific Census region (including California) had the lowest percentage of households with air conditioning as of 2020.

Following California, Louisiana (25.9%) and Mississippi (24.7%) rank next.

Full rankings

Where residents are most likely/least likely to reduce or skip basic expenses to afford energy bill

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey covering July 26, 2023, through Aug. 7, 2023.

Where residents are most likely/least likely to keep their homes at unsafe/unhealthy temperatures

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey covering July 26, 2023, through Aug. 7, 2023.

Vermont has the highest average annual household energy spend

How much are Americans paying for their energy? By state, Vermont has the highest average annual household spend on energy, with residents here shelling out an average of $1,818 a year. According to the NOAA, Vermont marked the warmest year on record in 2023, which may play a role here.

Despite these high costs, though, it’s worth noting that Vermont residents are the second least likely to cut back or skip necessary expenses to pay their energy bills at 22.6%.

States with the highest average annual energy costs per household

Source: LendingTree analysis of 2021 data from the U.S. Energy Information Administration (the latest available) and the U.S. Census Bureau Household Pulse Survey

After Vermont, Connecticut has the highest energy spending, with residents paying an average of $1,778 a year. Similarly, Connecticut experienced the second-warmest year on record, according to NOAA data.

Alaska ($1,708) rounds out the top three. Of course, Alaska’s naturally low temperatures likely play a role here.

On the other end of the list, Utah ($751), Nevada ($872) and Washington ($881) have the lowest annual energy costs.

Electricity costs don’t paint the full picture of energy costs

Of course, electricity costs are just one part of the equation — those who live in temperate areas may be luckier than others.

For example, Hawaii has the most expensive electricity in the country: Energy costs are $41.74 per kilowatt-hour, yet the average annual household spend in the state is $910 (fifth-lowest by state). As an island state, Hawaii is known for its temperate weather, with daytime averages ranging between 78 and 85 degrees Fahrenheit year-round.

Meanwhile, the average in Vermont is $21.00 per kilowatt-hour, though the harsh temperatures mentioned above likely affect annual energy costs.

Full rankings

States with the highest/lowest average annual energy costs per household

Source: LendingTree analysis of 2021 data from the U.S. Energy Information Administration and the U.S. Census Bureau Household Pulse Survey.

Struggling to pay an energy bill? Here’s what experts recommend

While it may be difficult to prioritize an energy bill, missing part or all of one isn’t usually the worst thing in the world — though there can be severe ramifications if you fall far behind.

“Unless you’re really late and the bill goes into collections, you probably don’t have to worry about a late utility bill wrecking your credit the way a late credit card payment might,” Schulz says. “However, you may get hit with a significant late fee. That is often either a flat fee or a percentage of the bill. When you add that late fee and the amount you owe from the previous month to the amount you owe from the most recent month, that bill can get really big in a hurry, especially in the heat of summer or the cold of winter. That snowballing can cause a major, major problem that requires some significant sacrifice to handle.”

And, of course, if your bill goes unpaid for too long, your power could be shut off entirely, which has enormous ramifications. To help prioritize your energy bills, Schulz recommends the following:

• Get your high-interest debt under control. “Credit cards and other big debts are budget-wreckers,” he says. “Taking steps to get those debts under control can free up funds that can be put toward paying those electric bills or even set aside for an emergency fund. It can be easier said than done, but you do have options. A 0% balance transfer credit card or a low-interest personal loan can help you dramatically reduce the amount of interest you pay each month, speeding the amount of time it takes to pay off that high-interest debt.”
• Call your lenders and ask to lower your current rates. “You can also consider calling your lenders, telling them about your struggles and asking them for help in the form of a lower interest rate, temporarily reduced minimum payment or even the ability to defer a payment,” Schulz says. “Banks are more likely to work with you than you’d imagine, but you have to make the call.”
• Don’t be afraid to ask for help. “If you don’t think you’ll be able to pay your next utility bill, reach out to the provider as soon as possible,” he says. “They may be willing to work with you on a short-term payment plan or recommend other groups that might be able to help you. You could also contact federal, state or local government assistance programs, nonprofit organizations, charities and more. It can be hard to be vulnerable and share your story that way, but tough times require tough choices.”

Methodology

To estimate where households struggle the most with energy bills, LendingTree researchers analyzed data from the U.S. Census Bureau Household Pulse Survey covering July 26, 2023, through Aug. 7, 2023. Specifically, researchers looked at the percentage of households that did the following at least once over the past year:

• Cut back or reduced necessary expenses to pay energy bills
• Kept their home at a temperature that felt unsafe or unhealthy
• Was unable to pay part of an energy bill or the full bill amount

To find the states where residents spend the most on energy, researchers analyzed 2021 data from the U.S. Energy Information Administration. Specifically, researchers divided the total annual spend on energy (via the Energy Information Administration) by the total number of households (via the Household Pulse Survey).