Living Like a Local: Utilities

Americans are famous the world over for consuming a lot of energy. In fact, Hannah Ritchie and Max Roser report:

The average US citizen still consumes more than ten times the energy of the average Indian, 4-5 times that of a Brazilian, and three times more than China.

“Energy” (2020). Published online at OurWorldInData.org.

Getting into the ethics of how much a nation or person consumes is beyond the purview of Vagabond Finances, but helping an individual US expat save money is right in the VF wheelhouse. Your income may be determined by others, but your expenses are not. The old “a penny saved is a penny earned” slogan has never rung so true.

Two expats working for the same school or charity, making the same wage with the same benefits, and living side by side in identical apartments can face very different financial futures based not on their incomes but on their expenses. Whether you are on the “frugal is fun” camp of expats or you think the “ex” in expat stands for extravagant, you won’t want to forget to consider the cost of utilities in your host country.

Exporting Our American Ways

As long as you’re just staying in a hotel for a few days while visiting some exotic country, you can probably get away with using your utilities just like you did back in the US. But the moment you start wearing that “expat” label and paying your own bills, some of those old habits might cost you.

Depending on where you live, the cost of natural gas, electricity, gasoline, water, and so on may very well be much, much more than you paid back home. An early wake-up call for me was when I had a national friend in my home and I made the mistake of leaving a room with the light still on. He flicked the switch and asked me deadpan, “So you don’t pay the bills here?”

Yes, it sounded very much like a “dad” comment and, yes, he caught me being a bit American, but I didn’t think that much of it. Well, I didn’t think much of it until I started paying attention to my electric bills. Oh my! It didn’t take long for me to start using lower watt lightbulbs, unplugging unused electronics, and, to my friend’s delight, turning off the light every time I left a room.

Sometimes what we export is an actual appliance or electronic device that’s going to cost us more dearly than we’d like. I’ve been an expat for over twenty years so I’ve seen and done it all. In Italy, several Americans I knew installed clothes dryers in their homes. Through the ‘90s, they actually imported them from the States and went to great lengths to convert them to European 220 volt energy sources and make some sort of ventilation system to pump out the exhaust. Those huge American dryers were a blessing for the time they saved, but the energy consumption took a lot of the fun out of it!

Of course, locals don’t always get things right either. We once noticed that several nationals in our apartment building had added air conditioners to their homes. It was a new habit that they’d adopted from the US. In fairness, it had been an extremely hot summer and I was more than a bit jealous of how much more comfortable it was for them than for me. However, the next year those air conditioners remained silent. What had happened? Well, this cheap American can only surmise that our neighbors discovered just how much electricity those air conditioners consumed. Electricity was particularly expensive that year on a per kilowatt basis. That life-hack imported from the States turned out to cost more than it was worth.

Importing things from abroad can be expensive. That can be as true for importing American ways of using utilities as much as it is for importing a Tesla or Mercedes. It pays to be careful.

What’s “On Sale” in this Country?

As we saw above, in Italy the sunshine is a free way to dry your clothes. The sun is “on sale.” In Iceland, on the other hand, you can readily get hot water (thanks to the geothermal underpinnings of the country) and cold water (thanks to the glaciers). They say only the visiting foreigners buy bottled water as the locals know they have cold, pure water coming out of their faucets. How about home heating? Well…

Geothermal water is used to heat around 90% of Iceland’s homes, and keeps pavements and car parks snow-free in the winter. 

Iceland’s energy answer comes naturally, Jessica Aldred, The Guardian

That’s right. No need to shovel snow! And you might find it easier to crack open a window in the winter than to turn down the heat.

One city may be sitting on oil reserves and another on methane. One country may have inexpensive production of electricity and another might subsidize the costs. Generally speaking, whatever your country imports from abroad will cost more. Some countries import oil, natural gas, water, or electricity. Even if it doesn’t cost more today, it might cost more tomorrow. Oil embargos, withholding the flow of electricity, and closing a valve on a pipeline have all been known to happen for political or fiscal reasons.

Switching from electric heating to methane heating, from natural gas to geothermal-heated water, from coal to wood pellets, etc. can move you from a full-price category into an “on sale” one.

If switching to an “on sale” resource isn’t an option, well, maybe that resource enjoys a “happy hour” of sorts. A growing number of countries, US states, and municipalities are offering cheaper energy if you will use it between certain hours of the day (or, more likely, night!). Others might charge you a relatively low price on a modest monthly usage of electricity, for example, but then charge progressively more for each level of usage. Much like a graduated income tax, the more you get, the more you pay.

What Should I Do?

The most important thing is what not to do. Don’t blindly import your American ways, don’t blindly accept the ways of the expat community around you, and, well, don’t blindly do anything where your finances are concerned.

Experience and cold calculations are your best bet, but don’t neglect the experience and calculations of others. Do you know a trusted, wise national? She or he might be the best place to start.

In some countries, you might even find electric companies, internet providers, etc. who will compete or bid for your business. In rare (but wonderful!) cases, you might find a company or individual who analyzes utility costs and will set you up with the optimum choice for you. Their fee usually buys you their insider knowledge and lots of savings!

Whether you’re washing your clothes in the local stream, drying your clothes in the sun, or heating your home from geothermal-warmed waters, using utilities like a local almost always saves you some cash.