By Andrew Housser
The average American home will spend about $2,000 on energy bills in 2012, with about 45 percent going to pay for heating. That equates to a big chunk of the average household budget, totaling about 4 percent of household income. If you fall behind on bills because of excessive debt or other problems, that monthly bill can become a significant burden. Worse yet, nonpayment can result in power being cut off, as well as a host of damages to your credit score. Many people find it is worth a bit of additional effort to trim utility bills, with tips such as these.
1) Unplug anything you are not using.
Turn off (and ideally, unplug) any lights or appliances that you are not using. Today, many appliances use power even when they are off. Unplugging them can help. To make this process more convenient, invest in power strips that turn off an entire system when it is not in use.
2) Change furnace and AC filters.
A furnace (or air conditioner) that works properly will be more efficient and less likely to fail. When you have your system serviced, ask for tips on system maintenance so you can handle it yourself next time. Change furnace filters regularly to keep your air clean and to ensure maximum air flow.
3) Turn down the heat.
If your health permits, lower the temperature in your home to 68 degrees (or even lower). For every degree you lower your heat, you can cut your heating costs by up to 5 percent. At night, or when you are away, lower the temperature as far as possible while protecting your health and the safety of your pipes.
4) Program the temperature.
Make furnace settings automatic by installing a programmable thermostat. These devices cost about $40 and are simple to install.
5) Save hot water energy.
Turn the temperature on the water heater to 120 degrees -- or, if yours is equipped only with a scale, turn it down a notch. Most people can save up to 10 percent of water heating costs, while still maintaining plenty of hot water. As a safety bonus, the water will be less likely to cause accidental scalding. Consider adding an insulating jacket (less than $20) to the water heater to maintain water temperatures and reduce heating time. Also insulate the first few feet of pipe that transport hot water from the water heater. Using a timer in the bathroom can encourage family members to keep showers to around five minutes long. Consider installing low-flow showerheads (less than $10) to cut down on water use. A good one does not feel much different, but does save hot water. Wash laundry in cold water to save $60 or more per year. Skip pre-rinsing dishes before putting them in the dishwasher, whenever possible, to save another $75.
6) Insulate to prevent drafts.
Carefully inspect your home for drafty spots where cold air can enter. Light a stick of incense and hold it near windows, doors, locks, recessed light fixtures and power outlets to check for drafts -- the path of the smoke will change with air movement. Caulk around windows to seal air flow. Install weather stripping and door sweeps around doors to block drafts, and use old-fashioned "draft dodgers" to quickly block leaks below exterior doors. If possible, install insulated electrical outlet boxes and light fixtures. The Energy Star program offers a free guide to home insulation at http://www.energystar.gov/index.cfm?c=diy.diy_index.
7) Audit and eliminate energy vampires.
Take a fresh look at your house to see where you are wasting energy. If you have old refrigerator in a garage just to keep drinks cold, unplug it or contact your utility company to take it away -- it could be adding 10 percent to 25 percent to your electricity bill. Close the fireplace damper and shut off fans in kitchens and bathrooms as soon as they are not needed, as both provide quick routes for hot air to exit a home.
8) Replace aging appliances.
If your ancient water heater, furnace, refrigerator, dishwasher or other appliance fails, consider replacing it with a more energy-efficient modern model.
9) Work with nature.
Open curtains and blinds during the day to take advantage of sunshine's natural light and heat. At night, close drapes and consider installing insulating curtains or blinds to keep heat in.
10) Install compact fluorescent bulbs or LED bulbs.
These types of bulbs cost more initially than a conventional incandescent light bulb, but they can last seven times as long and use a fraction of the power during their long life. Each CFL can save more than $50 during its lifetime.
11) Shop around.
If you have a choice of energy providers, compare prices once a year to obtain the lowest rates.
Spending a couple of hours making some modest home improvements could make a big difference to your utility bills this year. Once you begin looking for ways to save, you might uncover even more things you can do at your particular home, from unplugging the kids' video game system to running only full loads of laundry or dishes. Best of all, you can use your savings to invest in your future or pay off debt -- and that is a warming thought indeed.
Work with nature to save: Open curtains and blinds during the day to take advantage of sunshine's natural light and heat. (©iStockphoto/Thinkstock)
Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC and its wholly owned subsidiary, Freedom Debt Relief, a national consumer debt resolution firm that has served nearly 100,000 clients and manages more than $1 billion in consumer debt. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
