Yes, you read that right! Dividends pay my electric bills each month!
It is a great feeling knowing your electric bills are more than fully covered by your passive income.
In the event of job loss, it is not a complete “lights out” situation (literally).
As of February 2024, the average electric bill in the United States is $145.55 per month.
That adds up to an average $1,746.60 per year spend on electricity.
In New York, the average monthly electric bill is $202 per month which adds up to $2,424.00 per year.
Depending on your financial situation, this can be a large chunk of change.
Keeping Those Electric Costs Low
Of course, electric bills can differ widely between locations and seasons within the year.
For example, my electric bill is much higher in summer then in winter.
Nevertheless, there are plenty of things you can do to lower your electric bill.
There are the small things you can do:
Getting rid of old appliances that use more electricity, turning off lights when not needed, and unplugging things that are not being used.
Then there are the larger things you can do. These revolve more around lifestyle choices.
You can choose a more minimalist lifestyle with less products that consume energy.
This can also involve downsize or taking up residence in less space.
For example, I made the decision to live more minimalistic and have lived in a studio apartment the past 7 years.
My living expenses are low and my electric bill even lower.
But this type of lifestyle may not be an option for you (and that’s fine).
Dividend Income Covers My Electric Bills
Let us look at my electric bills for the whole of 2023.
For those who don’t know, I track and post my monthly expenses each month.
In 2023, I spent a grand total of $740.45 on my electric bills for the entire year.
Way below the national (and NY) averages. In fact, that means I am paying an average of $61.70 per month on my electric bills!
On any given month, one month’s dividend payments would more than cover an entire year of electric bills since I make an average of over $1,200 per month in dividends.
But let’s get specific.
Con Edison (ED) is my electricity provider. They bill me each month.
I own 86 shares of ED which means they pay me $285.52 per year in dividends (as of this post).
What that means is that my own electricity provider is paying 38.6% of my yearly electricity costs.
It is almost like I’m getting free electricity for over one-third of the year.
But let us now look at all my utility stocks. My utility stocks are ED, SO, D, PPL, and DUK.
The yearly dividend income from all these stocks together equals: $1,260.17 (or an average $105.00 monthly).
With a yearly electric bill of $740.45, my annual dividends more than cover my electric bills to a tune of 170.2% over-coverage!
Conclusion
Yes, dividends pay my electric bills each month!
This is my first time ever calculating the numbers like this. I was an eye opener for me for sure.
Prior to this, I was not fully aware of just how low my electric costs were.
Not complaining, of course.
This is possible for anyone to achieve as well.
Check out my Getting Started page if you are interested in beginning your own journey towards financial freedom.
Also, don’t forget to Subscribe for more great content and updates on my financial journey to freedom!
So, what do you think of this post? How close are you to covering your electric bills with passive income?
Let me know in the comments below!
Like this:
Like Loading...