3 ways to save energy

Making your home more energy-efficient could pay off.

  • Saving and Spending
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  • Saving and Spending
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Key takeaways

  • Consider buying energy-efficient appliances.
  • Think about replacing incandescent light bulbs with LED bulbs.
  • To keep the warm or cool air in your house, consider installing insulation and weather stripping.

Taking steps to save energy helps the planet. And it can help your wallet too. For example, if money isn't flying out the cracks in your windows in the form of wasted energy and higher energy bills, you may have more money to save for things you really want—like retiring one day or sending a child to college.

Here are 3 ways to help you save energy—and cut your energy costs.

1. Upgrade your energy-hogging appliances

In 2016, the average US household spent about $114 on electricity every month, according to the US Energy Information Administration.* Large household appliances like refrigerators, washers, and dryers make up a significant portion of this cost.

New high-tech, energy-efficient appliances can be pricey. But if you are willing to forgo premium appliances with whiz-bang features like a dryer that steams out wrinkles or a dishwasher with a stainless-steel door and hidden control panel, you can find energy saving appliances at lower prices. When you're considering your choices, the question is: How long will it take to recoup the higher purchase price through reduced energy bills?

On average, it takes 2 to 3 years for the higher cost of energy-efficient appliances to equal the money saved from lower energy costs—after that, you get the full benefit of all the savings from reduced energy bills. The average life span of appliances is generally assumed to be about 10 years.

Of course, your savings will depend on a variety of factors. Among them: energy costs in your state, how much energy you use, and the age of the appliance. If you're replacing a very old, inefficient appliance, your savings will likely be higher than if you were replacing a newer model. Plus, the number of people in your home can affect your energy use. More people using the appliances means more energy is used.

If an average family were to replace all of their appliances (refrigerator, washer, dryer, dishwasher, freezer, television, computer, and oven) with energy-efficient models, the estimated or assumed additional cost could be $750 over inefficient models—and take approximately 2 years and 11 months to make up the additional cost in energy savings.

Tip: Try the Refrigerator Retirement Savings Calculator at Energystar.gov.

The best occasions to buy energy-efficient appliances are when you are looking to replace your old model, or if your big appliances are extremely old. If you can wait, look for a big sale—for example, before or after Thanksgiving, Memorial Day, or Independence Day, when many retailers discount big appliances.

2. Replace existing lights with LED bulbs

If you're serious about saving energy, consider replacing your regular light bulbs with light-emitting diode (LED) bulbs. Think of it as a long-term investment and not a quick way to save a load of cash. You may need to replace many incandescent bulbs to see some significant savings over the years.

LED bulbs cost a bit more than regular incandescent light bulbs. The good news is that the price has fallen drastically in recent years. And they should last much, much longer than incandescent bulbs and use less energy.

Compact fluorescent (CFL) bulbs typically last for 6 to 10 years, while LED bulbs generally have a life span of 20 years or more. CFLs and LED bulbs also produce much less heat than incandescent bulbs, and offer better quality of light and brightness. Plus, some LEDs can even be controlled remotely with your smartphone or tablet.

White LED light bulbs equivalent to 60-watt incandescent bulbs cost anywhere from $7 to $20 for a pack of 4.

The estimated or assumed cost of buying LED bulbs is an extra $50 above incandescent bulbs—assuming 15 bulbs are purchased. LED bulbs should last more than 10 years according to manufacturers. It will take about 7 months for the energy saved by LED bulbs to make up the difference in price in an average household.

3. Add insulation and weather stripping

Insulating your walls and adding weather stripping to your home can help keep the energy you use inside your house. Insulation is one of the most cost-effective ways to make your house more energy-efficient. Good insulation not only helps keep your energy bills low, it also keeps the air at a comfortable and consistent temperature.

Weather stripping can plug up cracks and crevices where warm or cold air would escape. It prevents air infiltration around windows and doors through the elimination of gaps in your windows and doors when they are closed. The estimated or assumed cost of installing weather stripping is around $300. It will take about 4 years and 9 months for the energy savings of weather stripping to pay for itself in the average household.

Before upgrading your insulation or adding weather stripping, consider getting a professional home energy audit. You can find out where your home is losing energy and how to prioritize the work to make your home more efficient.

The biggest advantage of insulation and weather stripping is a lower energy bill, and the upfront costs for these are normally recovered through energy savings within the first few years. According to the Environmental Protection Agency’s Energy Star program, you could save an average of 15% on heating and cooling costs.

What if you make all 3 energy-saving moves?

The estimated or assumed cost of upgrading to energy-efficient appliances, switching to LED bulbs, and installing weather stripping would be about $1,100 more than choosing inefficient options and not adding weather stripping.

The upgrades will take about 3 years and 4 months to pay off in the average household.

Saving money on energy can be as simple as making sure you turn off lights, and keeping your home a little cooler in the winter and a little warmer in the summer. Saving even more may require an investment in making your home energy-efficient. It may take time to see a payoff but, in the end, the savings are worth it.

Next steps to consider

Set priorities, determine your goals, and build your financial plan.

Answer 9 questions to get a financial wellness plan.

Weigh the pros and cons—it's not always just about money.

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