10 Money-Saving Home Improvements To Cut Energy And Repair Costs

Some homeowners are willing to put money into home improvement projects if it means raising their property’s value over time. There are some improvements, though, that’ll end up saving you money over the course of your homeownership.

Take a look through our list of the best money-saving home improvements and decide what’s best for your home and budget. Consider your financing options, too, like personal loans and cash-out refinancing.

Improvements To Save Money On Home Repairs

Performing constant home repairs and maintenance can put a strain on your budget. Consider the following home improvements to save money on potential repairs and replacements. 

Security System

A home security system is a major deterrent to criminals, most of whom look for a security system before attempting a burglary. Home security systems work because they alert you of intruders immediately if someone breaks in, and monitored systems notify the local authorities who will investigate the reason for the alarm.

Considering the average value of items stolen from U.S. residences is $2,661, installing a security system could save you thousands in the long run.

• Average installation cost: $279 – $1,106
• Average monthly monitoring plan: $10 – $65

Regardless of whether your home is ever burglarized, a security system could still save you annually on your home insurance policy. Many insurance companies discount their premiums for security systems.

Gutters

Water damage is a major home expense – if water leaks into your basement or foundation, it could cost you tens of thousands of dollars to repair. Proper drainage cannot be overlooked. Gutters must be cleaned annually, maintained regularly and routed correctly to prevent water from eroding your home.

• Average repair cost: $180 – $568
• Average installation cost: $585 – $1,535

Gutter installation costs can vary depending on materials and the square footage of your home, but for what they can save you in damages and repairs, place this project at the top of your to-do list. Plus, new gutters can improve the appearance of your home.

Hardwood Floors

Installing hardwood floors can not only exponentially raise the value of your home, but also save you money and time in floor maintenance. Hardwood flooring is famously long-lasting and durable, whereas wall-to-wall carpeting needs replacing every 8 – 10 years.

• Average installation cost: $2,484 – $6,800
• Average repair cost: $450 – $1,550

In addition to being easier to clean than carpeting, hardwood flooring looks great. Hardwood can also be refinished if damaged or stained, which will be significantly cheaper than replacing the entire floor. 

Energy-Saving Home Improvements

In addition to repairs, utility bills can eat up a lot of a homeowner’s monthly budget. There are many ways to make your home more energy-efficient, but home improvements can pay off quickly. Consider saving energy – and money – with these upgrades.

Attic Insulation

Energy bills, especially in the winter, can go through the roof, along with the heat. You can keep that heat inside your home by insulating your attic and saving yourself in utility bills.

• Average installation cost: $1,500 – $3,500
• Average annual savings: $200 per year

With proper insulation you can keep your home’s temperature consistent throughout the colder months and not worry about what you’re spending to stay warm. Additionally you can make your windows more energy-efficient by sealing or caulking air leaks along their frames.

Smart Thermostat

Smart home devices are paving the way for energy-efficient living. If you take the time to install and program your smart thermostat, you can expect immediate energy savings as the thermostat starts “thinking” for you. These smart thermostats “spend time doing the thinking that most people just don’t do,” points out The Wirecutter. Smart thermostats turn off when no one is home, target temperatures to only occupied rooms and can even learn your household schedule for heating and cooling needs.

• Average cost with installation: $175 – $1,000
• Average annual savings: $180 per year

You can access a smart thermostat through an app, giving you control when you’re at home or out on the go.

Ceiling Fans

While installing ceiling fans can’t fully replace air conditioning, they can dramatically cut down your cooling costs. These fans can work in tandem with your air conditioning to provide a cool breeze through your home and keep the rooms in your house cool in warmer seasons.

• Average cost with installation: $144 – $351
• Average repair costs: $80 – $200

Ceiling fans should only be installed in rooms with high ceilings. Choose bigger fans for bigger rooms.

Smart Lighting

Today’s smart lighting comes in different shapes and forms, from energy-efficient lightbulbs – like light emitting diodes (LEDs), compact fluorescent lamps (CFLs) and halogen incandescents – to automated lighting systems.

Motion or occupancy sensors are a great way to avoid leaving the lights on in empty rooms because they turn your lights on and off based on movement. Lights controlled by home automation can also save on your electricity bill by allowing you to remotely control lights, preset lights to turn on and off during certain times of the day, along with analyzing lighting usage so you can make more energy-efficient choices.

• Average cost: $50 – $200 for a starter system
• Average savings: $225 per year

Energy-efficient lightbulbs last 3 – 25 times longer than traditional bulbs, and you can do most installations yourself.

Solar Panels

Solar panels continue to improve. The cost of solar panels has become cheaper, their ability to capture the sun’s photons and convert them to electricity is becoming more efficient, and the technology is changing as solar shingles emerge as a more mainstream item.

Experts note that the time before payoff on solar panels is also getting shorter – the average rooftop solar system will pay back a homeowner in 7½ years. The sooner you install your solar panels, the sooner you’ll see the average savings on your lowered energy bills.

• Average installation costs: $17,947 – $34,252 (for a full system)
• Average annual savings: $650 – $1,500

In addition to lowering – or eliminating – your electric bill, you can receive a 22% tax credit until 2024, when the government renews the Investment Tax Credit. The National Renewable Energy Laboratory (NREL) also found that homes with solar panels tend to sell 17% more than homes with regular utilities.

Low-Flow Shower Head

High-pressure shower heads can use up to eight gallons of water per minute, which you’ll see add up on your water bill. Installing a low-flow shower head is cheap and can save about six gallons of water per minute in usage.

• Average installation cost: $30 – $65
• Average annual water savings: 2,000 gallons

Switching to a lower pressure may take some getting used to, but just wait until you see the difference it makes in your utility bill. You can save even more by doing a DIY installation.

Tankless Water Heater

A tank water heater uses energy to keep water heated all day, but going tankless means that water gets heated only when it’s needed. In addition to saving you in energy throughout the day, tankless water heaters tend to have longer lifespans.

• Average installation cost: $1,232 – $3,531
• Average annual savings: $100+ per year

Upfront costs for a tankless heater may be high, but you’ll see that returned over the years in what you’ll save in water and energy.

Best Ways To Finance Your Money-Saving Home Upgrades

Since the prices for some of these improvements run high, it could be worth it to finance these projects with a home improvement loan. As for what type of loan is best for home improvements, review the following options and decide what best suits your situation.

Cash-Out Refinance

A cash-out refinance is a popular method for financing home improvements. Essentially you refinance your mortgage for the amount you still owe, plus withdraw up to 80% of the equity you’ve built into the home as cash. You can use this amount to pay for home improvements or repairs.

It's important to note that a cash-out refinance comes with closing costs and fees. Make sure you carefully consider how much your home project will cost and weigh it against your potential savings before committing to a refinance. In general, cash-out refinances are a good way to finance large projects rather than small upgrades.

Personal Loan

A personal loan is an installment loan that can be used for home improvements and other types of large purchases. Your loan amount, rates and terms are based on your credit score and history, and you’re given the loan in a lump sum to be repaid in monthly installments.

If your project isn't large enough to justify a cash-out refinance, but still costs a bit more than you want to pay out-of-pocket, a personal loan could be a good alternative.

Home Equity Loan Or HELOC

Home equity loans and home equity lines of credit (HELOCs) involve using your home's equity as a loan. In this way, they are similar to cash-out refinancing, but it's worth noting that there are some key differences between them.

With a home equity loan, you borrow a loan amount against your home equity that you can use for a variety of reasons, including home improvements. One important difference with this financing option is that your home is used to secure the loan, so if you can’t repay the loan, your lender can take your house through the foreclosure process.

A HELOC is similar but instead of a lump sum loan the borrower gets a line of credit they can withdraw from and repay over time. HELOCs are also secured using your home as collateral, so you again stand to lose your home if you fail to repay the loan.

The Bottom Line

As a homeowner, you have a variety of upgrades available to you that will actually save you money. Some, like gutters, are highly affordable, while others, like solar panels, are on the pricier side. If your renovations will be on the higher end, it might make sense to look into a cash-out refinance.

Using a cash-out refinance to fund a home upgrade can be a savvy choice if you can leverage current equity into added savings, added home value, or both. If you think this financing option would be a good fit for you, why not start the process to get a cash-out-refinance today?