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Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Save $400 on Your Electric Bill Right Now

According to the Department of Energy, nearly $2,000 of your annual salary goes directly toward your electric bill. 

Many people assume that in order to combat this cost, you have to buy new, "green" technologies, appliances and solar panels.

Fortunately, many people assume incorrectly. 

Utilities are one of the easiest and fastest household expenses to cut. If you have $50 or less, you can slash your energy bill by over $400 a year using your existing central air system and appliances. 

But before we get into saving you hundreds, let's first look at some of the largest energy costs in your home:

Understanding who the main culprits are in your home's energy consumption is key to effectively slashing your electric bill.

According to EnergySavers.gov, nearly half of your energy bill comes from heating and cooling your home, with water heating, lighting, applicances and others nearly split.

So put away your solar panel catalog, because you can save a ton of money using very little cash.

Ready to start slashing your bill? Let's look at the average houshold's biggest energy users to see how we can drastically reduce your expenses:

Air Conditioning -- Estimated Annual Cost: $200 - $450

Biggest Spenders: People who crank the A/C up so high during the summer that they could wear sweaters inside. 

Price to Pay: Nearly half the cost of an electric bill during the hot summer months comes from cranking the A/C.

Good to Know: According to the American Council for an Energy-Efficient Economy (ACEEE), for every degree you set your air conditioning above 72 degrees, you will save 3 to 5% on your A/C costs.

How to Slash Your Electric Bill:

  • Use ceiling fans and standing fans to help keep you cool while you're home; you should be comfortable with your A/C set to 76 or 78 degrees.
  • Set your thermostat back 5 to 8 degrees when no one is home or everyone sleeping, or program your thermostat to automatically adjust the temperature for you during the day. 
  • Don't place lamps, TV sets and other electronic devices that create heat near your thermostat. They'll cause the A/C to kick on when it's not needed, draining energy and your wallet.
  • Dust-clogged air filters will harm your central air system and sap its effectiveness. Replace the air filter in your home at least every three months to maximize its efficiency. 

Savings: $55 to $180 per year (depending on your location's summer length and heat)

Central Heat -- Estimated Annual Cost: $370 - $1040

Biggest Spenders: People who use central heat to warm a house with too many empty rooms.

Good to Know: According to ACEEE, for each degree you turn down your thermostat from 70 degrees (for 8 hours per day), you reduce your heating bill by roughly 2%.

How to Slash Your Electric Bill:

  • "Heat the room, not the whole house" is a wise European's conservation tip. Before you turn up the heat, try using personal space heaters, a fireplace, or a simple sweater to keep warm. 
  • Use your programmable thermostat or manually turn your thermostat down from 70 to 62 degrees during sleep or work hours, and you can cut up to 16% off your heating bill. 
  • Replace your air filter every three months to keep your central heating system running efficiently and debris-free.

Savings: $60 to $160 per year (depending on your location's winter duration and temperature)

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Water Heating -- Estimated Annual Cost: $317

Biggest Spenders: People who store their water heater tank in a cooled area of the home.

Good to Know: If your tank water heater is stored in cooled area of your home, the tank is losing significant heat to the surrounding cool air and raising your air conditioning costs at the same time. 

How to Slash Your Electric Bill:

  • Insulate the unit and lower the water temperature, and use less hot water.
  • Buy a heater blanket ($10 to $20) and pipe sleeves ($6 for 6 feet) to wrap around and insulate the tank and its pipes. You can slash 4 to 9% off your bill, according to ACEEE. 
  • Turn the temperature on your tank heater down to 120 degrees (midway between low and medium setting), or turn it off when you go off on vacation. Every 10 degrees you turn the temperature down can slash 3 to 5% off your bill.
  • Use less hot water around the house -- rinse dishes and wash un-greasy clothes in cold water. And if you install water-conserving showerheads and faucet aerators ($1 and $10 each) you can reduce the amount of water you need to heat without ever missing it.

Savings: Up to $200 per year

#-ad_banner_2-#Refrigerator -- Estimated Annual Cost: $156

Biggest Spenders: People who use fridges 10 years or older.

Good to Know: The average 10-year old fridge uses 40% more energy than a new one according to energysavers.gov. Fridges stored in warm areas make the unit's compressor work harder and less efficiently.   

Ease the load on your fridge's compressor and increase its efficiency with a few adjustments. 

How to Slash Your Electric Bill:

  • Move a fridge that's in the hot garage, in the basement, near a stove or under sunlight to a cooler place in your house. 
  • If you can part with it, sell your 2nd fridge in the garage (half the fridges, twice the savings).
  • Raise the temperature in your fridge to no lower than 36 to 40 F, and 0 to 5 F in the freezer. Turn the fridge's "anti-sweat heater" feature off to save an added 5 to 10% on your bill.
  • If your fridge has exposed coils (check the manual), you can wipe the dust off of them to reduce its energy consumption by 6%.

Savings: Over $30 per year

Lighting, Computers, Electronics and Other Appliances -- Estimated Annual Cost: $719

Biggest Spenders: People who leave appliances, extension cords and power strips plugged in and/or turned on at all times.

Good to Know: "Vampire appliances" suck $120 dollars worth of energy per year even when they're turned off. If you use all 100-watt, incandescent light bulbs, it can cost you up to $200 per year.  

How to Slash Your Electric Bill: 

  • Turn off all lights that aren't being used, and use all lights you need wisely.
  • Unplug all electronics that aren't being used: The biggest thieves of energy are plasma TVs ($165 per year!), desktop computers, phone and laptop chargers, printers and sound systems. 
  • Replace your incandescent light bulbs with CFLs ($4) to save 50 to 75% on lighting costs. And don't forget about old fashioned natural lighting from your windows; it's free.
  • Clothes dryers cost $85 per year to run. Throw a clean, dry towel in with your wet load to speed up the drying time. Put in one load after another to keep the dryer hot and cut energy use.

Savings: Over $150 per year

[For more great energy saving tips, see 11 Simple Ways to Save on Utilities]

The Investing Answer: Following even a few of these electric bill slashing tips could save you several hundred dollars over the course of a year. 

For the fastest results and largest savings, cut back on the air conditioning or heating, use window lighting when it's feasible, and unplug or turn off things that are not in use.

Photo courtesy of Flickr.