Beating Broke

Personal Finance from the Broke Perspective

4 Tips for Saving Money on Your HVAC System

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One of the most expensive costs of managing your home is related to your HVAC system. Your HVAC system (heating, ventilation, and air conditioning) can gobble up energy and drive up the cost of managing your home. Cooling and heating account for about 48% of energy costs. Reducing costs associated with your HVAC system will lower your overall costs for home management. Follow these four tips for cutting costs.

Change Your Filters Regularly

Changing the filters on your HVAC system can help to reduce costs. Filters help to keep the airflow moving smoothly through your system, which helps to reduce the load on your system. In other words, changing the air filters frequently will improve your energy efficiency. This simple step can also extend the life of your system. You can expect the average furnace to have a life span of around 15-20 years. If you take care of it, you may be able to extend it beyond those years. Changing your filters at least once a month will help you to cut the cost of running your home.

Clear Away Debris

Keep outdoor units clear of debris. HVAC systems depend heavily on unobstructed airflow. Grass clippings, leaf litter, and other organic debris should regularly be removed from around your outdoor HVAC equipment. Making it a habit to clean the outside of your home and keeping bushes and other plants from becoming overgrown near your HVAC system is an easy way to cut the operating costs of your HVAC system. You should clear debris each week. You can use a water hose to clean the unit itself. Never use a high-pressure hose or you could damage the coils on the unit.

Have Professional Tune-Ups

One of the easiest ways to keep costs down on home repairs is to ensure that all your essential systems are getting the maintenance that’s needed. Your HVAC system should get annual professional maintenance. An HVAC “tune-up” can help to keep your system in top condition and help reduce the costs of operating your home. An HVAC inspection can reveal if there are any problems that need to be addressed. The service also includes cleaning up your system and making sure that all the components are in top working condition. It’s an affordable service that every homeowner should subscribe to. Taking care of the systems in your home is one of the most effective ways to keep costs down.

Make The Job Easier for Your HVAC System

About 25%-30% of heat and cooling loss occurs because of old faulty windows and doors. Sometimes, to cut home management costs and reduce the cost of your HVAC system, you must invest time and money. While replacing all of your windows right now may not be within the budget, there are other things that you can do to help your HVAC system work more efficiently. Check for drafts and use weather stripping to seal the drafts. You can also use a clear plastic sealer on your windows to help improve energy efficiency. Even small changes add up to savings on your home HVAC usage. Caulk any spaces around your window. Check your attic for areas that may need attention. If you can afford to invest in new windows, that will be a game changer for your home and for cutting costs. If you cannot do what you can to seal out the elements and reduce drafts.

A lot of people make the mistake of thinking that if they are not using a room in their home, they should close the vents. Your system is designed to work with all the registers open. Another error is constantly changing the temperature of the thermostat. Set it and forget it. Follow these tips to save money on heating and cooling costs in your home, and to extend the life of your HVAC system.

How We Used the Proceeds from the Sale of Our House

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We Used the Proceeds from the Sale of Our House

This summer has been a crazy one. We found out in May that my husband would likely get a new job 2,200 miles away from our home, and in June, he signed the contract for the new position. We sold our house, bought a new house, and drove four days across the country to settle in our new area. Thanks to the housing shortage due to the pandemic, we made a nice profit on our old home. Here’s how we used the proceeds from the sale of our house.

About Our Old House

Our old house had almost doubled in value from when we bought it eight years ago. When we listed it, the house sold in three days, and we had six offers, two of them for over asking. The couple we picked also waived their right to an inspection, which saved us money.

About Our New House

Our new house is slightly larger than our old house and cost 8% more than our old house sold for. Unfortunately, the property taxes are three times higher. (Yes, property taxes in Arizona, where we moved from, are affordable.)

We wanted to find a smaller house that cost less than our house in Arizona. However, we only had a week to look for a home in our new area. Unfortunately, many of the places on the market were less than desirable, with moldy tubs and awkward layouts. Or, a few were in highly desirable areas and went well over asking; we had no desire to pay that much.

How We Used the Proceeds from the Sale of Our House

I would have liked to have put all of the proceeds from our house into our new home so we would have a smaller monthly payment, which is especially important in this high-interest rate environment. However, both our financial planner and mortgage broker talked us out of this.

Instead, we used the proceeds from the sale of our house this way:

Seventy percent for a 20% down payment on our new house and to cover closing costs.

We Used the Proceeds from the Sale of Our House

Six percent to increase our emergency fund. This allowed us to grow our emergency fund from one month of expenses to 2.5 months.

Four and a half percent for home improvements. While we didn’t pay over asking for this house, we did pay the list price. The house has some issues like mold on the wood window in one of our kids’ bedrooms, which we will need to replace before winter comes. We also need to replace a leaky, cracked sink and a few other items.

Six percent to increase our car replacement fund. We’ll need a new car within the next year or two. (Our current vehicle is 18 years old.) So, we added to this fund.

Two and a half percent to cover moving costs. We had to pay for our hotel rooms and food as we journeyed across the country, as well as other miscellaneous expenses.

The rest is unassigned for now. We’ll see how we need to use the remaining money, whether for college tuition, increasing the emergency fund further, or buying other household needs like a snowblower.

Final Thoughts

We tried to use the proceeds from the sale of our house as responsibly as possible. As a result, we were able to put 20% down on our new house, and we were able to bulk up many budget categories that put us in a more secure financial position.

Read More

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The Irrationality of Seeking the Lowest Gas Price

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Seeking the Lowest Gas Prices

This week, I drove through the Costco parking lot, and I noticed that the usual entrance to the Costco gas station was blocked off. Instead, gas station traffic was diverted to the area by the entrance of Costco so a longer line could form and not block other parking lot traffic. I followed the line for gas and discovered it was at least 10 cars long. What?! What is this irrationality of seeking the lowest gas price? I am a Costco member, and yes, gas there can be up to 25 to 30 cents a gallon cheaper, but I would never wait in such a long line for gas.

Why do Americans obsessively attempt, at any cost, to pay the lowest gas price? Do they not know that their efforts cost them precious time and yes, even money?

One Woman’s Pursuit of the Lowest Gas Prices

I have a relative I will call Judy, who is a low gas price chaser. She will drive 10 miles or more out of her way to save a few pennies per gallon on the price of gas. She has a 10-gallon tank. If she pays $5.04 at her local gas station, filling her empty tank will cost $50.40.

If she cruises to a town 10 miles away, she might pay $4.98 per gallon, meaning a fill-up will cost $49.80. She saved .60 cents, but did she? She also wasted gas to get to the lower-priced station and took 20 to 30 minutes of her time to do so.

Why We Don’t Seek the Lowest Gas Price

I’m frugal in general. My husband and I only take our family out to eat about five times a year. We drive old vehicles. My Toyota Sienna is a 2004 and has 231,000 miles on it. My husband’s car is a 2013 and has 105,000 miles on it. We live in a modest neighborhood, and when we bought our house, we bought one that was on the lower end of what we could afford.

We like to save money, so you might be surprised to learn that I don’t play the lowest-gas-price game. It’s not worth it to me.

My minivan has a 20-gallon tank, and our nearest gas station sells gas for $4.86 a gallon. To fill up my minivan costs a whopping $97.20. Ouch! Gas at our nearest Costco is $4.55 a gallon. Filling up there would cost $91, so I would save $6.20. However, I do not want to wait in line for 30 to 45 minutes to save six bucks.

Seeking the Lowest Gas Prices

Instead, I choose to limit my driving while prices are so high. We stay home a lot more, and when we drive, we combine errands, so we don’t use as much gas. Right now, I’m filling up every two weeks.

Final Thoughts

Americans are obsessed with seeking the lowest gas price, only to save at most a few bucks, or, at worst, a few cents. To do so, they have to spend money and precious time. Rather than chasing the lowest gas price, a more lucrative option may be to find other frugal ways to save money that more significantly impacts their bottom line.

Read More

Why Buying a Toyota Sienna Was One of Our Best Decisions

Don’t Make the Cost of Gas Your Scapegoat

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