By FPA member Leslie Beck, CFP®
Last Updated: January 25, 2010
Making environmentally smart decisions now can save you a lot later. Many states, including New Jersey and New York, have programs in place now that are very similar to the proposed federal "Cash for Caulkers" program. In fact, 25 states have programs, providing either state or public utility incentives to make homes more energy efficient, using a combination of grants, tax incentives and low cost loans. Many of these state programs have no income limitations, as well.
Find out if your state participates by checking out dsireusa.org, an interactive Web site run jointly by the U.S. Department of Energy (DOE), North Carolina State University, and the Interstate Renewable Energy Council.
Here's a list of suggestions for helping the environment while helping your pocketbook:
- Get a home energy audit. Your home is usually the area where you can find the biggest savings available. According to the Natural Resources Defense Council, some 40 percent of all energy used in the U.S. goes to buildings, mostly in the form of heating, cooling and lighting. You can do an audit yourself or hire a professional to analyze your home's energy efficiency, and give you tips on how to cut down on your energy bills. Simple improvements such as adding insulation and sealing air leaks to cut down on drafts can cut your energy bills substantially, sometimes as much as 25 percent or more.
- Invest in a solar hot water heater. If you plan on staying in your home for awhile, this could provide you with substantial savings, cutting your annual hot water costs by up to 50 percent, according to the DOE's EnergySavers Web site. With federal tax incentives, the payback on investment can be as short as four to six years. The formula for determining your own payback can also be found on Energysavers.gov.
- Take advantage of the 2010 tax credit for energy saving improvements and equipment. A credit for 30 percent of the cost (up to $1,500) is available for the purchase of qualifying equipment such as biomass stoves, heating, cooling, and ventilating equipment, insulation, roofing, non-solar water heaters, windows and doors. There is no income limitation for the credit — however, it must be used for an existing home that is your principal residence. Get more information.
- Reduce your daily energy footprint. There are numerous ways to reduce your daily energy usage. Replace your current incandescent bulbs with more efficient Compact Fluorescent Light (CFL) bulbs. Plug appliances such as microwaves, coffeemakers, TVs, and DVRs into power strips, then shut the power strip off when the appliance is not in use. These "phantom" energy drainers can represent as much as five percent of your total household energy use. Invest in a programmable thermostat that can adjust the temperature in your home when you're not there. Using one will pay for itself in just one year, according to the DOE.
- Ride a bike. It's estimated that almost 50 percent of U.S. car trips are less than five miles, according to Edward Maibach of George Mason University. And with the average American using an estimated 500 gallons of gasoline per year, according to the DOE, you could save hundreds of dollars annually by replacing those short car trips with a bike ride. And you'll be in better physical shape to boot!
- Use your own shopping bags. Not nearly as big a money saver, but a very simple one — bring your own shopping bags to the grocery store — with incentives from two to five cents per bag reused, you could save up to $10 per year (based on 2002 A.C. Nielsen data showing the average U.S. citizen makes 75 trips to the grocery store annually).
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FPA member Leslie Beck, CFP®, is FPA of New Jersey chapter director and Vice President with Compass Wealth Management LLC in Maplewood, NJ.