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Beyond The Latte Effect (The Heating Bill)

December 10th, 2012 by
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Thermostat

This is the seventh installment of a monthly series that shows the effect small simple changes in our lives can have on our finances. Last month, we looked at homemade holiday treats as opposed to store bought. This month, with winter here, people will be cranking the heat to keep warm. Let’s see how much we can save by actually being diligent with our heating bills.

Summer and winter may be polar opposites, but the same energy issues are still relevant. In summer, people love their air conditioning. In winter, people crank the heat. Like everything else, I’m sure most people appreciate paying a premium for instant gratification. The use of energy is no different.

I was chatting with a buddy of mine who works as head of public relations at BC Hydro, our local electric company. They were sharing with me how much money people can save during the winter if they regulated the length of time they kept the heat on. To be honest, it wasn’t that the dollar figure that surprised me as much as it was the minimal adjustment needed to achieve it. By simply putting on a sweatsuit and some thick socks, the difference in comfort was next to nothing. So how much would you save?

The Cost Of Heating Your Place

A 1000 watt electric heater running for 50 hours a week will set you back about $15 during the winter months. Most homes will use about four of these, so let’s say the total is $60. $60 per year is a pretty small number and, at first, I figured it was too small to kick up a fuss over. However, it was more an illustration of how people can save even a little with a such a tiny adjustment.

The Results

Let’s imagine that you saved that $60 into your RRSP at an 8% rate of return.

  • 10 years – $600 contributed, $929 market value
  • 20 years – $1200 contributed, $2965 market value
  • 30 years – $1800 contributed, $7425 market value
  • 40 years – $2400 contributed, $17999 market value

How Will You Stay Warm

To be honest, I’d rather just bundle up. Not for the financial gain, but more because I’m too impatient to wait for the whole place to heat up. But as long as it’s there, the financial gain isn’t that bad either for just $60 a year.

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6 Responses to “Beyond The Latte Effect (The Heating Bill)”

  1. Shane says:

    I am with you heating bills can get outrageous. I am glad In my house growing up you got a blanket and didn’t turn up the heat. You can always warm up with a blanket and save some cash.

    • Aaron Koo says:

      Have you found that using a blanket also has the addded advantage that if it’s too hot you simply get rid of the blanket, whereas if you turn on the heater, you have to wait for the place to cool down?

      • Shane says:

        Yes that is why i opt for a blanket. you can also just stick a leg out if it gets hot. I also sleep better in the cold, so not having to mess with the heat at night is also nice.

  2. Colin Dean says:

    Turn down the heat 1? and you’re saving change. Turn down the heat 2? and you’re saving money. Turn down the heat 3? and you’re living in an ice box!

    Just kidding!

    The thing that’s really helped my own bills thus far is the Nest Thermostat. I’ve had it now for two months and my bill is noticeably slimmer, even when accounting for a difference in outdoor temperature. It’s been a great boon – especially when I’m going to be away for a day and I can turn down the heat, but use the mobile app to turn up the heat an hour before I head home. I like coming home to a warm house!

    http://j.mp/SMxHRF (affiliate link – help me fund my purchase!)

  3. Zagorath says:

    Rugging up when it gets cold is great, but how about when the heat sets in? Unfortunately there’s only so much removing of clothes you can do, and in 30+ degree weather it’s never going to be comfortable without at least a fan.

    I’ve found I can use a lot less energy by opening as many windows as I can find and using a fan, rather than relying on the much less energy-efficient air conditioning, but unfortunately with heat there isn’t a zero-energy option like there is in the cold.

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