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What a Difference One Degree Makes!


Having a discussion about home energy consumption and saving money can sometimes seem intimidating so it might be best to start with the fundamental equations at the heart of the issue.

E (energy) = M (money)

Therefore, more energy equals more money.

Home energy use is divided into four components by the U.S. Energy Information Administration: heating, cooling, water heating and appliances, electronics and lighting. Studies by the EIA show that over the past 20 years the way we consume energy has changed. Overall home energy consumption has dropped since 1993 and home heating, which represented 53 percent of our use, now represents 41.5 percent.

The decline in home heating costs is largely due to improved construction techniques resulting in better insulated and more energy efficient homes. It’s not all good news however, water heating and air conditioning have seen an increase in their share of our energy bills of just under 1 percent for water heating and almost 2 percent for air conditioning.

How Much, is Too Much?

On average home energy costs US households about $1.24 per square foot of floor space which means a modest 1,600 square foot home will use about $2,000 a year in energy. Of course this amount varies depending upon where you live and when you home was built.

Another factor that contributes to the level of energy consumption is the number of people living in the household. This means when everything else is equal (the size, year built and appliances) the home with four residents is likely going to use more energy than the household with two people.

Why Save

Reducing home energy consumption has two key benefits:

  • It helps protect the environment by reducing greenhouse gas emissions.
  • It’s good for the budget.

A reduction of 10 percent will net the average family an annual savings of about $200. That may not sound like a huge amount but energy consumption is not a one time, one year event. It happens year in and year out and can add up to a substantial amount of money over time. If you were 30 years old and started saving 10 percent at current levels and invested it at just 6.5 percent interest you could add nearly $40,000 to your retirement savings.

How Much Do I Need to Save for Retirement?

Simple Ways to Save

Your windows are a great place to start when it comes to ways to reduce your heating and cooling costs and it doesn’t require changing or upgrading your windows. Windows are intended to do two things: keep the outside out and let the outside in, so why not use that to your advantage?

Cold Weather Window Tips

Even the best windows are less then ideal insulators against the cold. Adding drapes or insulated blinds to windows will go a long way to reducing drafts and the loss of warm air that comes in contact with cool windows.

Warm Weather Window Tips

If you live in an area that is cooler at night than during the day consider turning off the air conditioner while you sleep and opening the windows. In the morning close the windows and blinds to keep the hot air out and to block the sun from further heating the interior of your home.

Improve Ventilation

Regardless of what type of house you live in one this is true for everyone: hot air rises, so give it someplace to go. A thermostatically controlled attic exhaust fan works by removing hot air that accumulates in attics and crawlspaces, which means your AC doesn’t have to work as hard to compensate for the heat that radiates downward into your living space.

Ceiling Fans

Summer or winter ceiling fans do a great job of moving air around. In homes with high ceilings turning a ceiling fan on low is a great way to move the warm air trapped up at the ceiling down to where you are. In the summer they help to distribute cool air and the breeze can give the feeling that it is several degrees cooler than it actually is.


Sometimes spending a little in one way can save you a lot more in other ways. When it comes to heating and cooling your home, controlling the level of humidity goes a long way. For example in warm or hot dry climates adding moisture to the air will dramatically lower the temperature in your living spaces. Conversely if you live in a warm to hot humid climate removing moisture will go a long way to cooling you down and for less than blasting the air conditioner.

All methods of home heating remove moisture from the air, leaving skin and throats dry. Adding moisture with a humidifier will not only do wonders for your skin but it will raise both the real temperature and the comfort level of lower temperatures.

Programmable Thermostats

These miniature computers are the cheapest, most effective way to lower your home heating and cooling costs. They can usually be installed in under 10 minutes with just a screwdriver. A programmable thermostat is only effective if you use it to your advantage.

Most programmable thermostats allow you to set multiple on/off and temperature cycles for each day of the week. This means you can set your thermostat to automatically adjust the temperature before you wake-up and again when you leave for work or school and yet again in preparation for your return home. Adjusting the level of heating and cooling to do more or less when you are  not around will save you significantly on your home energy costs without altering your comfort.

Tips for Saving More Money

  • Find the best savings account for your needs. For instance, high-yield savings accounts like Ally or Marcus by Goldman Sachs are great options if you’re saving up for short-term financial goals.
  • Work with a financial advisor. While it may seem counterintuitive to spend in order to save money, a financial advisor can help you maximize your income, minimize taxes and create a long-term plan for your money. A matching tool like SmartAsset’s SmartAdvisor can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Photo Credit: flickr