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Cutting your monthly utility bill

Among the three main "operational cost" areas for most households — automotive, food, utilities — utility costs fall in the middle when it comes to being flexible (grocery costs are usually the easiest to reduce, while automotive costs tend to be the most difficult to cut).

In the latest issue of Sound Mind Investing, we look at several steps you can take to cut the cost of utilities. Here are a few ideas from that article (the full version is here), starting with suggestions for saving on electricity costs.

If you have a central heating and air system, now is an excellent time of year to make sure it's operating at peak efficiency — reduced efficiency translates into higher cost. Leaky ductwork, for example, can reduce efficiency up to 20%, according to the Alliance to Save Energy.

An inspection by a certified technician may cost $50 to $100, but those could be dollars well spent if the inspection results in lower AC bills throughout the summer.

Depending on where you live you may be able to get an inspection at no cost. Many power companies offer efficiency inspections as part of a free or low cost "energy audit." Such audits not only check for leaky ducts, but also for leaks around windows, doors, electrical outlets, chimneys, etc. Call your power company or check its website to find out if such a service is offered in your area.

The audit may show that some caulking and weather-stripping will significantly reduce air loss. Audit recommendations will likely include adding extra insulation in the attic (a total of 12-15 inches is recommended by the Department of Energy). Cost? Expect to pay 50¢-$2 a square foot, depending on local climate and type of materials. But you can recover up to $500 by means of a 2011 federal tax credit.

Additional ways to save on electricity — all of them low- or no-cost — are shown in the table below:

As with electricity, the only way to save on the monthly cost of water is to use less of it. Low-flow shower heads (cost: $10-$50) commonly reduce per-person water usage by hundreds of gallons a month. Low-flow heads take some getting used to, but remember you'll also be saving on electricity (or gas) costs, since you'll be using less hot water.

You may also want to investigate replacing your toilets. Many newer models use water more efficiently than older ones. Some even come equipped with dual flush modes, so you can choose between a less-water-intensive flush or a heavier flush.

Another way to conserve water is to fix leaks. That sounds obvious, but many people effectively wash money down the drain by putting off such simple chores as replacing a faucet washer or toilet flapper. A 50-cent washer and a $10-$15 toilet repair kit will pay for themselves almost right way, and will generate an annual "investment return" likely to outdistance any return you'll earn in the stock market.

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