Achieving financial goals and learning a thing or two along the way

What I Learned from an Electric Bill About Money Goals

by Gary Foreman

Sometimes finding out where your money is going proves to be an interesting journey. I remember a time years ago when I wanted to reduce our electric bill. It was summertime in Florida. I put the family on notice that we were going to reduce our consumption of electricity. And we did. Lights went off. Thermostats went up. My wife and kids were helpful.

The next month our bill came and it was down substantially! We had won! Of course, being a bit of a fanatic, I decided that we'd really attack our bill the following month. So I got even more aggressive in finding ways to cut power usage. This time my family began to grumble a little. And, they probably had a point. August in Florida is no time to see how little you need the air conditioner!

Finally the electric bill arrived. I was about to be vindicated! But, wait. What's this? The bill was almost as high as it was two months ago before we started all the energy saving moves. How could that be?

It took a little tracking, but I figured it out by looking at old bills and doing a little detective work. In past summers, there was always one month where our bill was lower than normal. And the following month always had higher than typical usage.

It wasn't until the following summer that I finally realized what happened. I just happened to be home when the meter reader came through our neighborhood. To my surprise, they didn't visit every house. I can't be absolutely sure, but it appeared that in the summer, they'd skip some houses and enter an estimate of usage for that house. They'd purposely guess low so that the homeowner wouldn't complain. Then the next month they'd read the meter and the electric company would get what they were due.

It was just a coincidence that the first month of my savings plan happened to coincide with the month that our meter wasn't read and a low estimate was used to calculate our bill. Ultimately, we did find a way to reduce our bill. Our air conditioner was 12 years old. And even though it cooled, it wasn't that efficient. So we replaced it with a more energy efficient model.

Why do I tell this story? Because it demonstrates a lot about achieving financial goals. And, the many ways that you can sabotage your own efforts. So let's see what we can learn.

Related: Setting and Achieving Monetary Goals

Are you sure that you know what you know? Sounds strange. It should. But the question is important. You're basing your decisions on certain assumptions. Are those assumptions true? In my case, I assumed that the electric bill represented the amount of electricity we used the prior month.

Turns out, that wasn't always true. At least it wasn't true during the two months that I counted on. So I really didn't know what I thought that I knew. It pays to examine your assumptions. Test them if possible. It's foolish to build anything on a shaky foundation.

Enlist your family to work with you. It's easier to accomplish a goal as a team. Because I made reducing the electric bill my personal mission, my family felt that their efforts were unnecessary. In fact, by nagging, I probably pushed them into hoping that I'd fail.

Instead, I could have asked them to help analyze the problem and set the goal. That would have made them partners in the solution. Not only would I have gotten help reaching my goals, but also I would have created a teachable moment.

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Look for trends, not quick flashes. Trends tell you a lot more about what's going on. They usually indicate an underlying, ongoing situation. If your bill goes up (or down) month after month, you know that whatever is causing it isn't likely to just disappear.

I went for the flash of two electric bills. One was high and the other was low. I would have been better off with a goal of reducing the bill by 15% over a 6-month period. I could have avoided using bad information to make a decision. And, any change in the way our family consumed electricity would have been much more likely to become permanent.

Sometimes you find answers in unusual places. I expected that turning down lights and adjusting the thermostat was the solution to lower bills. Then I thought it was the meter reader! Turns out that ultimately the answer was a new air conditioner. Don't be afraid to go where the leads take you.

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Be prepared for mid-course corrections. It's easy to go in a straight line. Pretty much anyone can do that. But, if you're heading in the wrong direction, you won't reach your goal. You'll need to adjust your course.

There's nothing surprising about that. If you take a driving vacation every so often, you look at a map. You may find it necessary to change your route. That's just what we do with financial goals. We need to continue to collect information. And, then we need to take appropriate action based on what we've learned. New information led me to a couple of course corrections in my search for lower electric bills.

Related: The Dark Side of Goal Setting

We finally did get a lower bill. A combination of turning off lights and a new air conditioner did the trick. It took us awhile, but that's ok. Not only did we reduce expenses, but also we learned a lot in the process!

Reviewed April 2018

Take the Next Step:

  • Examine your goals. Enlist your family. Adjust to any new information.
  • Learn more ways to come up with whole family financial solutions.
  • Funding an emergency fund now can help prevent debt problems and even bankruptcy later. Start saving today with these 11 easy ways to find $1000 for an emergency fund.
  • Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
Gary Foreman

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, and Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.

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