Money Management

Winter is not my favorite season, but I cope. Learn how you too can lower your heating costs without turning your home into a walk-in freezer. 

Ah, winter — back again. I live in a place that gets real winter, including a considerable amount of snow and freezing temperatures. And since I don’t like to spend an arm and a leg on my utility bills, I’ve got a few tricks up my sleeve to keep the hit to my checking account as minimal as possible. Here are five tips for lower heating bills.

1. Get your heating system checked

We are already into winter, so while you can still make this first move, it’s a good idea to go ahead and add it to your fall to-do list for the future. Call an HVAC technician and have them come out to give your system a full check-up. If anything seems hinky, you can get it fixed before the coldest day of winter.

While you’re at it, get some new furnace filters and ditch the old ones. Depending on the exact nature of your particular heater, you may need to replace your filters monthly or seasonally — ask that technician for a recommendation. Furnace filters aren’t super expensive. I found multipacks of different sizes listed for around $30 at Home Depot. Changing your furnace filters regularly can help the system perform better and heat your home more efficiently — and keep you from breathing in pollen, dust, and other gunk that circulates inside your home via your heating ducts and vents.

2. Sign up for budget billing

If you want more predictable winter heating bills and you’ve established a billing history at your current place of residence, consider opting in for budget billing through your utility company. This works by calculating an average of your usage over the previous year, and you’re charged a set amount based on that. I signed up for this last year, and the company still comes to read my meter, and every few months, the amount I pay changes (based on predicted versus actual usage, as well as the cost of the energy).

While this move will not lower the amount you owe, it makes it much more predictable, so you’ll have an easier time budgeting for that heating bill. And since changes are factored in over time, you won’t see a huge spike in your bill. Before I signed up, I’d go from moderate bills in the fall as it was just getting cold — only to see a major jump once the winter set in. If you dread opening your heating bill every month, budget billing can tamp down some of your anxiety.

3. Invest in a space heater

I love space heaters, and since electricity is cheaper than gas in my part of the world, I am tangibly saving money by using them (and keeping my furnace set at just 64 degrees). The trick with space heaters is to remember their limitations and lean on their strengths. They work best inside a single room — if you’ve got a big open floorplan living and dining room, a small electric heater will struggle to appreciably warm that much space.

So instead, use one in your bedroom or perhaps your home office, if you’re fortunate enough to work from home. On these cold winter days, I close myself in my office and let the heater run — my cats appreciate it too and it never takes them long to appear when the heater turns on.

A few vital safety tips for space heaters:

Protect the unit from falling over.Don’t run it when you’re not in the room.Plug it directly into a wall, rather than an extension cord.Supervise pets and children closely.

4. Visit the hardware store

If you can feel the cold winter wind inside your home, you’ve got leaky windows and doors. If you own your home, maybe set a goal to replace them (this would be a great use of a home equity loan or line of credit). But if you rent, you still have options. Take a trip to your favorite hardware store and invest in some new door seals and weather stripping to reduce or eliminate that breezy feeling and keep the cold air out and the warm air (that you’re paying for) in.

As for your windows, I recommend sealing them with plastic sheeting. No, it won’t look pretty — but when you hear that winter wind rattling against plastic instead of chilling you to the bone, you’ll be glad. You can buy kits with pre-cut plastic and rolls of double-sided tape for under $10 at Home Depot. Just be sure you measure your windows ahead of time.

5. Break out your winter wardrobe

I certainly understand the impulse to lounge around in shorts and a T-shirt when you’re at home, but winter is not the time to lean into this. Rather, I’m going to give you some classic Dad advice: Don’t turn up the heat. Go put on a sweater.

Better still, go scoop up some fleece pajamas and cozy sweatshirts from your favorite department store on holiday clearance. You can keep from freezing while you’re lounging around at home, without spiking your heating bill.

Winter heating bills can put a crimp in your personal finances, but if you’re strategic, you can lower your costs without needing to build a trash can fire in your living room. Stay warm and remember — it’s only a few short months until spring.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Want to make one smart year-end financial move? Open a high-yield savings account. Earning a higher APY on your savings can improve your financial life. 

Do you have cash sitting in a bank account that’s earning near-zero interest? If you can do one thing for your personal finances before the end of 2023: open a high-yield savings account.

Too many bank customers are effectively losing money by missing out on higher APYs. According to FDIC data, as of Dec. 18, 2023, the national average bank savings account was paying only 0.46% APY. If you had $10,000 in a savings account that paid the national average APY, after one year you would have… $10,046.

That’s terrible! You and your savings deserve better than to put up with near-zero interest rates. Move your cash to a higher-yielding account. Earn interest. Make your money work harder for you.

Let’s dive into a few more details about why this one year-end financial move is so important.

In case you didn’t notice: Interest rates went up in 2023

During the past several years since the Great Financial Crisis of 2008, America’s financial system was in a long stretch of low interest rates. This allowed banks to get away with paying lower yields on savings accounts and certificates of deposit (CDs).

After so many years of ultra-low interest rates, many people might have forgotten that savings accounts are actually supposed to help your money grow. But during 2023, as a monetary policy response to high inflation, the Federal Reserve hiked interest rates fast and furious. This led to higher bank savings account APYs than we’ve seen in a long time.

The good news is that, as of December 2023, the best high-yield savings accounts are now paying 5.30% APY.

See how much you can earn with a high-yield savings account

Getting a higher yield on your savings account can make a meaningful difference to all kinds of savers, no matter how much money you have in the bank. Let’s look at a few different savings account balances, and how they’d benefit from a higher APY.

Here’s why we chose the numbers:

$1,200 is the median U.S. savings account balance, according to a survey from The Motley Fool Ascent in July 2023.$5,000 is the median emergency savings balance, according to the Transamerica Center for Retirement Studies. (Their number is bigger than the one that our survey found, but it’s worth including to illustrate a slightly larger account balance.)$25,898 is the average U.S. savings account balance, according to our Motley Fool Ascent survey. (Some high-net-worth Americans have a lot more money in the bank than the median or “typical” household, so that makes the average savings account a lot bigger than the median.)

Here’s how much each of these savings accounts would earn after one year with the national average APY compared to a high-yield savings account:

As you can see, moving your money into a higher-yielding savings account can make a big difference. If you want your money to grow, get it out of the near-zero average bank savings account, and go get a higher APY.

Why high-yield savings accounts are a good deal for people with low savings

Many Americans don’t have much money in the bank. Our Motley Fool Ascent survey found that 41% of Americans have less than $500 in savings. If you don’t have a big savings account balance, you might wonder if it’s worth getting a high-yield savings account. Our survey found that, when asked why they hadn’t moved money to a higher-yielding account, 35% of people said “I don’t have enough savings for a higher interest rate to matter to me.”

Life is hard when you don’t have enough cash in the bank and you’re living paycheck to paycheck. But even for people with near-zero savings, a high-yield savings account is still worth getting. Here’s why:

You deserve every dollar: Banks that pay near-zero interest on savings accounts are not helping you succeed; they’re just making money off of you. It’s the principle of the thing: As a bank customer, you deserve to earn as much interest as the market will offer.Your money needs to grow: Even if you only have a few hundred dollars of emergency savings, you deserve to have that money go to work. Let your savings account quietly earn more money for you with the power of compounding interest.You can get inspired by higher APYs: With near-zero interest rates, it often feels like there’s no point in saving money. But earning higher interest can help motivate you to take steps toward better financial health. It feels incredibly empowering to see your savings account grow. What if a high-yield savings account could help motivate you to clarify your personal finances, get a budgeting app, and make some big changes in your financial life?

Bottom line: The best high-yield savings accounts are now offering APYs of up to 5.30%. Anyone who has cash in the bank, even just a few hundred dollars, deserves to earn interest on their savings. Don’t put up with shabby treatment and low APYs from banks. This year, go get some yield. You, and your savings, are worth it!

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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