There are many reasons to budget and save money. It may be to pay off your debts or it can be to save up for a very important expense that you have always wanted to make. Regardless of your financial situation, these two are something that you have to continually do.
Budgeting will help you live within your means to keep you from spending more than what you should. Saving will help you prepare for financial goals that will enable you to grow your personal wealth. Of the two, saving is probably the most proactive task that will help you change your financial situation for the better.
There are many saving tips to be found everywhere and most of them revolve around your household expenses. In fact, this is where you should concentrate because it eats up a huge portion of your income.
Important statistics about household expenses to help you save
Your household expenses are comprised of several categories. You have your food, clothing, shelter, transportation, gas, health care, energy etc. All of these are important expenses so it is difficult to decide which of them should be given more attention.
While you can save a little on each category, there is probably nothing more rewarding than saving on energy. There are many saving tips about this category because it does not only help you save, it is also good for the planet. Apparently, the energy we consume is produced somewhere. If it is not renewable energy, it is produced at the expense of Mother Nature.
The US Energy Information Administration reported that in 2012, consumers spend 2.7% of their income on energy bills. This is said to be the lowest percentage in the last decade. It is evident that people are consciously cutting back on energy consumption. The article on EIA.gov reports that:
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US households saved up to $12 billion on energy expenses when comparing between 2012 and 2011. Although gas prices went down in 2012, electricity prices stayed the same.
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The average energy expense per US household for 2012 is $1,945. Most of this includes lighting, heating, cooling, appliances and electronics. It also includes the consumption of gas – excluding transportation fuel. Water consumption is also not included here.
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Based on the report from the Bureau of Labor Statistics, energy bill payments rank 8 in the overall household category expense. But unlike the other expenses, it does not change across all income brackets. Those who earn less (lower 20% of the income bracket) have to use up 6% of their income on energy bills. Those who earn the top 20% of the income bracket only spend 3% of their income.
* Source: http://www.eia.gov/todayinenergy/detail.cfm?id=10891
The article observed that the lower consumption may also be affected by the warmer climate that we are all experiencing today. It seriously lowers the heating expense of households. In another report by the EIA, they mentioned that space heating in 1993 used to be 53.1% of the overall energy consumption. In 2009, the percentage is down to 41.5%. The breakdown is as follows:
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Space heating: 53.1% (1993) vs 41.5% (2009)
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Appliances, electronics and lighting: 24% (1993) vs 34.6% (2009)
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Water heating: 18.3% (1993) vs 17.7% (2009)
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Air conditioning: 4.6% (1993) vs 6.2% (2009)
Source: http://www.eia.gov/todayinenergy/detail.cfm?id=10271
It is obvious that the need for heating lessened significantly because of the warmer climate that we are all experiencing. Although the cooling expense grew, it is not significant enough to increase the energy costs of making the average home’s temperature comfortable. From 58% in 1993, the heating/cooling expense is down to 48%. This can all be attributed to the fact that people spent on making their homes more energy efficient. This includes proper insulation in the home and the rising number of energy efficient appliances and equipment. Overall, the energy consumption of US household is steadily declining and it could be expected to go down further.
It has to be noted though, that there is a big increase in the energy consumption from appliances, equipment and lighting. The possible explanation for this is that we have more electrical items in our homes. For instance, we have more kitchen appliances and our electronics like TVs, stereos, etc have all multiplied in past decades.
Tips to save on your energy costs
According to the EIA, modern homes consume more Btu (British Thermal Units) than those constructed in the 1980s. Apparently, those in older homes consume an average of 77 million Btu while houses constructed between 2000 to 2009 (2009 being the date of the report) consume 92 million Btu. There is certainly room for more savings if you are resourceful enough to find out how.
With the changes in our climate and the advancements of technology, it is easier to consume less energy. However, it is a challenge to know the specific tools that you should use to accomplish this feat in your own home. With that, here are some energy saving tips that we have compiled for you to help you save money at home.
Saving tips for lights
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Use dimmer switches. This way, you can tone down the light emission from your bulbs.
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Compact Fluorescent Lamps or CFL bulbs consume less energy so use this for all areas of your home.
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Install motion sensors that will automatically turn your lights on or off.
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Use LED night lights as they are cheaper and known to last longer.
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Install solar lighting outside your home. They can stock up on sun’s energy during the day and run all night without using electricity.
Saving tips for heater
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Make sure your home is properly insulated in the right places.
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Lower the water heating system 130 – 140 degrees.
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Insulate around 6 feet of the piping that goes from your heater to help keep the water warm.
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Low flow shower heads mean less water needs to be heated and this will lower the energy used for it.
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Replace your old water heater with a tankless one – that way, it is known to lower your heating costs by half.
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Utilize extra thick blankets during winter.
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Use a programmable thermostat so you can ease up on the HVAC when you are at home or while sleeping.
Saving tips for the cooling system
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Install ceiling fans so you do not have to use your air condition unit all the time.
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An attic fan can also help keep the hot air from staying in your house. Since hot air usually rises, cooling your attic should allow the rest of the house to stay cooler.
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Close off the curtains or blinds when the sunlight hits the window of your home.
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Plant a tree on the side of your house where sunlight hits.
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Make sure your HVAC maintenance is done on an annual basis. This will not only make your system function better, it give you cleaner air.
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Change the filter on your HVAC every 30 days.
Saving tips for appliances/equipment
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Keep your refrigerator and freezer full as much as possible. The food can act as an insulator that will keep the coolness without much energy from the ref.
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Opt to air dry your clothes by installing a clothesline in your backyard. If this is not possible, install a drying rack in your bathroom and put your clothes there overnight. Once it has dripped, you can remove it from the bathroom so it can be used. Transfer it in another place within your home where it can dry further – like near the window.
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Do not leave your appliances and equipment on standby. It still consumes energy unnecessarily.
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Turn off the heat dry feature of your dishwasher. You do not need the heating system to clean your dishes.
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Replace old appliances with Energy Star units.
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Wash your laundry in cold water – unless the clothing requires otherwise.
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Wait until you have a full washer before doing the laundry or washing dishes.
General energy saving tips
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Avail of the energy audit of utility companies. Most of them offer it for free so it should not cost you anything. Or you can research how it is done.
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Check if your community offers lower rates during off peak hours. This should be a great time to do the laundry, load the dishwasher or heat water that you need.
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Check your doors and windows for gaps and have them fixed.
All of these tips should help you keep a tight lid on your energy consumption.