Home Improvements that Actually Save You Money

Don't believe that spending money can actually save you money? When it comes to home improvement, investing in cost-effective upgrades can actually save you a bundle in the long-run.

The average American household spends more than $1,600 a year on utility bills, according to the Department of Energy. With many homeowners facing escalating mortgage costs, and concerns growing over an impending recession, it's more important than ever to find ways to save on home-related costs. Spending a few extra dollars now on certain home improvements can save you more money later when a recession could be in full swing.

Here are five areas where a modest investment now could reward you with significant savings later on:

Lighting

A simple way to save on electric bills is to replace incandescent light bulbs with compact fluorescent lights (CFLs). Incandescent bulbs are major electricity consumers. It will cost you $4 to $15 per bulb to replace incandescent lights with CFLs, but you'll reap an energy cost savings of about $25 to $30 per bulb over the life of the bulbs. CFLs also outlast incandescents, meaning lower costs per year to replace burnt-out bulbs.

Windows and Doors

In 2007, home heating costs rose nearly 10 percent, according to the Energy Information Administration. Leaky windows and doors are top contributors to high heating and cooling bills. While replacing windows and doors can be an expensive proposition, doing so can improve your home's energy efficiency as much as 70 percent. That improved efficiency can save you thousands of dollars over the usable life of the new windows and doors.

Heating and Cooling Systems

First, if you don't already have one, install a programmable thermostat that allows you to automatically reduce heating and cooling use during those times of day when you need it less, like at night or when you're not home. Next, if your heating, ventilation and air conditioning (HVAC) is more than 10 years old, consider replacing it with newer, more energy efficient equipment. Look for an Energy Star rated unit; it can save you up to 20 percent on heating and cooling costs, according to the government-sponsored Energy Star program.

Insulation

Another easy fix that will require you to spend a little - but not necessarily a lot - is to upgrade insulation. As much as 80 percent of houses 28 years old or older are not insulated to government standards, the U.S. Department of Energy says. If the insulation in your attic is less than 15.5 inches deep, it's not enough. Installing more insulation is something you can easily do yourself.

Homeowner's Insurance

Finally, after you've made all these energy-efficient improvements - or any other major home improvement for that matter - you'll want to evaluate the cost-efficiency of your homeowner's insurance. Changes in the structure and equipment in your home can affect the coverage and cost of your homeowner's insurance. Comparison shopping can yield significant savings - between 15 to 25 percent on your annual premium, according to the Insurance Information Institute.

The easiest way to comparison shop is to go online to a site like www.InsWeb.com. You'll need to complete a detailed quote form, but at the end of the process you'll receive multiple quotes from agents in your area, as well as major insurance carriers - usually within 24 hours of completing the quote form.

To learn more about energy-efficient home improvements, visit www.energystar.gov. To comparison shop for more efficient homeowner's insurance, go to www.InsWeb.com.

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