Q. What can I do to reduce my cooling costs?
A. The cost of electricity has increased in Eastern Massachusetts by approximately 12.6% over last year, according to the latest report from the US Bureau of Labor Statistics. Some homeowners’ electric bills can triple during the summer to account for air conditioning. Last week, Eversource, New England’s largest utility, said its basic service customers (about a quarter of households in eastern Massachusetts) should expect an increase of about 36 % of their electricity bills this summer compared to last year.
The US Department of Energy recommends setting your air conditioning to 78 degrees when you’re home. When you’re not at home, set it 10 degrees higher or turn it off. Yes, it will take some time to cool the house when you return. But not as much as you think, because a higher indoor temperature actually slows the flow of heat through your home. Use a programmable thermostat to automatically adjust your settings based on your schedule.
A few tips: Using a fan or fans allows you to set your air conditioner to a higher temperature without sacrificing comfort by circulating cool air; be sure to change filters regularly for maximum air conditioning efficiency; use a dehumidifier on humid days to feel cooler; close curtains and other window coverings to prevent sunlight from heating your home; and use the oven and stove sparingly in hot weather.
Q. How can I save money at the gas pump?
A. Shop around for the cheapest gasoline. This week, a gallon of gas in my area ranged from $4.79 to $5.70, according to GasBuddy. My midsize sedan has a 16.5 gallon tank. Filling up at the lower price saves me $11.55 over the higher price.
Q. Can I save on gas by joining a loyalty and rewards program?
A. Yes. There are many options, from convenience stores and large refueling companies to supermarkets and warehouse stores. Pick one or more that work for you and stick with it. As gas prices have skyrocketed this year, lines of vehicles waiting to fill up have lengthened at my favorite BJ station. BJ’s stations are competitively priced for non-members, while members get an additional 5 cents per gallon discount.
Q. What about grocery savings?
If your supermarket has a rewards program and you don’t use it, you’re leaving money on the table. The rules vary from supermarket to supermarket, but basically you get points for every spend you make, usually one point for every dollar. You can redeem your points the next time you shop at that supermarket (usually $1 off for 100 points) or for discounted gas at a participating gas station. Digital coupons offer more discounts. Make sure you have your store app on your phone to take full advantage of the lowest prices.
Q. What about recurring charges?
A. Many consumers pay certain monthly expenses “automatically” by debiting their credit card or checking accounts. These recurring charges required authorization, but only once, maybe months or even years ago.
Have you checked your recurring expenses lately? Take a look at your monthly statements. You may be paying for something you forgot or now realize you don’t really need it.
One of my recurring charges is Spotify, the audio and media streaming service. My adult children and I all listen to music on it. But spending $10 each on four individual plans was too expensive, so we got a family plan for $16, dramatically reducing our cost per user from $10 to $4.
Here’s a caveat about recurring expenses: you can pay your phone bill or other monthly expenses with your credit card. Good. It’s convenient and prevents you from missing a payment by mistake. Plus, it gives you valuable credit card reward points. But don’t get out of the habit of reviewing your monthly bills. There may be new charges that you did not authorize.
Q. Do I need to purchase extended warranties?
A. I recently purchased a printer/scanner from Best Buy for almost $290 including tax. When the cashier called, she asked if I wanted the four-year extended warranty for $35. I said no out of reflex. Was I wrong?
In fact, I did the right thing, according to Consumer Reports. Consumers who buy extended warranties (and there are plenty of them) overestimate the likelihood of needing them. Consumer electronics and household appliances are actually quite reliable, and in the event of a breakdown, the cost of a repair is not much higher than the cost of the extended warranty.
Also, if you use a credit card, you may already have an extended warranty. My credit card company doubles the one-year manufacturer’s warranty. So I’m good for two years at no additional cost.
Q. What about car insurance?
A. Consider increasing your auto collision insurance deductible. Mine is now $1,000, but if I increase it to $2,000, I save $73, a 25% reduction.
Is it worth it? One thing to consider: If you opt for a higher deductible, make sure you have enough savings to cover the higher deductible in case you need repairs.
Owners of older low-value vehicles should probably ditch collision insurance altogether. If your vehicle is worth less than 10 times what you pay in your annual collision premium, it’s not worth it, according to an unwritten insurance industry rule.
Another way to save on auto insurance is to pay up front. I saved 11% this year doing this.
Q. What about reducing my cable bill?
A. A good way to reduce your bill is to stop renting your modem, router and other equipment. I bought a modem and router for $290 to save $14 a month. The modem and the router will be amortized in 21 months. I also replaced the three digital adapters I rented from Comcast for $25.50 a month with streaming sticks for my extra TVs. Streaming sticks cost less than $50 each. They will be paid in less than six months.