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Everyone wants to save a little cash. And if you own a home, the desire to shave costs might be even greater if you feel like you're constantly shelling out money for home repairs or improvements. To save money as a homeowner, try to develop a few key habits while also considering a few bigger investments that pay off over time. Check out this guide for tips and tricks that could put more money back into your pocket.
Lower Your Utility Bills
One of the easiest and most rewarding money-saving options for homeowners is cutting back on utility bills. Gas, electric and water bills can add up each month, and if you're not careful with how you consume, these bills can get out of hand.
Here's how to get started:
- Use LED bulbs and dimmer switches. While more expensive upfront, as with a lot of cost-saving strategies in the home, they pay off over time because they last much longer than incandescent bulbs. Dimmer switches will help you reduce energy by lowering light when you don't need full power.
- Purchase and use energy-efficient Energy Star appliances. Buying a new refrigerator or dishwasher may not seem like a good way to save money, but if yours breaks, replacing it with an energy-efficient appliance can offer significant savings in the long run.
- Consider buying a programmable and efficient thermostat.
- Completely fill your washing machine and dishwasher before using them.
- Use power strips to shut off energy to multiple appliances and electronic devices at once. If you don't unplug this way each night, many of your household items will continue to consume energy even when they are not being used (but are still plugged in).
- Watch your water usage. Consider lowering the heat setting on your water heater, fixing leaky faucets and washing clothes in cold water.
If you plan to live in your home for many years and you're ready to make big changes that will save you money over time, consider these options:
- Install solar panels. Solar panels can help you cut back on your utility bills by converting solar rays into energy. Solar panels will allow you to rely less on energy companies for your home's power and may even make you completely self-sustainable. There is typically a significant cost to install systems like these, so the savings might not seem immediate, but they will happen over time.
- Make sure your home is properly insulated. Insulation keeps air from traveling from inside your home to the outside and vise versa. No matter what season it is, you'll want your home to be well-insulated to protect against wasting money on heating and cooling. For simple insulation fixes, seal any cracks around your home that allow air to flow in and out. In the winter, consider sealing windows and doors to prevent the transfer of temperature. If you need new home insulation, get quotes from several providers. While insulating your home can be quite expensive, it's another fix that will save you money in the long term.
Look Into Tax Benefits
As a homeowner, there are certain tax benefits that you enjoy. These credits could mean serious savings come tax time, but without the right accounting, they could be easily ignored. Here are two major tax savings a homeowner can claim when filing their taxes:
- Renewable energy tax credits. The federal government offers a program that allows homeowners to apply for a tax credit when they install certain renewable energy devices in their home. Homeowners can claim certain amounts on their taxes if they've installed the following: fuel cells, small wind turbines, solar panels, solar hot water heaters or a geothermal heat pump. You can find more information about these tax credits on the government's Energy Star website.
- Mortgage tax deductions. If you own a home and have a mortgage, you may be eligible to deduct your interest payments from your taxes at the end of the year. Homeowners can deduct the interest expenses on up to $750,000 in mortgage debt if the home was purchased after December 15, 2017, according to the Internal Revenue Service. These savings can also be considerable, and shouldn't be forgotten at the end of the year. Note: Tax law previously allowed homeowners to deduct interest expenses on up to $1 million in mortgage debt. For homes purchased prior to December 15, 2017, homeowners can still deduct interest payments on up to $1 million in mortgage debt.
How Your Credit Score Can Help You Save Money
One advantage of having a good credit score is being able to get preferential interest rates and terms on new lines of credit. As a homeowner, this can help if you have large purchases coming up or want to leverage the equity in your home for a loan.
If you own a home and are planning a big project in the near future, consider opening a credit card to finance and get rewarded for your purchases. Depending on your credit scores, you may be able to take advantage of a bonus offer that gives an introductory 0% annual percentage rate (APR) for new purchases. You may also be approved for a credit card that offers rewards for shopping at certain stores or for making certain purchases. Just be sure to pay off the balance in full before the intro period ends. If you're thinking of applying for a rewards credit card or a card with a 0% introductory APR, check out Experian CreditMatch™ to be paired with personalized credit card offers based on your FICO® Score☉ .
Another way to leverage a good credit score when you're a homeowner is to use it to get favorable terms on a home equity loan or home equity line of credit. These types of loans are based on the equity you have in your home, and your good credit can mean getting a low interest rate and favorable terms when you apply. These loans can be used for home improvement projects, but could also be used for other things you need. While taking out a loan may not seem like a money-saving strategy, if you're in need of cash, your good credit as a homeowner will likely save you money over the life of the loan, freeing up cash you can use for other purposes.