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Tip #2: Turn your thermostat down 3 degrees

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This is Tip #2 of the 30 Day Challenge to save $1,000.

Today’s tip is to reduce your thermostat 3 degrees colder starting right now. Below, I’ll show you some additional math / tips to show you the effect this will have on your finances.


This year, the Energy Information Administration projects that Americans will pay about 15% more in their heating bills this winter, because of colder weather and higher fuel costs.

How much will you save?
“The rule of thumb is that you can save about 3% on your heating bill for every degree that you set back your thermostat” full time, says Bill Prindle, deputy director for the nonprofit American Council for an Energy-Efficient Economy.

To keep the math easy, let’s assume we can save 10% by cutting 3-4 degrees off the thermostat. Here are some sample savings. Note: The actual numbers for the heating bills were obtained very un-scientifically (too many variables to consider).

San Francisco: $10 off a $100 bill
Chicago: $20 off a $200 bill
New York: $15 off a $150 bill
Phoenix: You may not have a heating bill to save on… during the day will still probably be using your A/C. The same rules apply in this case, just in reverse. $10 off a $100 bill.

How to make this tip actually work
I can already hear the sighs of a thousand people: “But Ramit,” you might say, “I already know about this.” Then why don’t people do it?

Because (1) it’s not sexy and novel, and (2) it only takes one cold day after work when you come home and say, “Forget it, I’m turning the heat up today.” And once you adjust your thermostat up, it never goes back down again.

The trick is this: First, turn your thermostat way down when you go to work. That’s free money. Second, think about what causes you to turn the heat up. When you come home from work, the first thing you notice is probably how cold it is – and it’s just natural to walk over to the heater and turn the heat way up. Avoid this: Sure, turn up the heat to a reasonable temperature, but instead of blasting it at 75 degrees, keep warm slippers, a blanket, and a hat somewhere convenient right when you come home. Just put them right near the door. No more thinking – it’s just a natural part of coming home and putting your bag down. (Read more about barriers here.)

I’m doing this at my house. As soon as I come home, there are slippers and a sweatshirt right near the door.

Savings: $10-20

Bonus reading about thermostats
I know, I know, what could be more exciting? Check out this page on Madison Gas and Electric for some common myths about your thermostat.

* * *

Last thing to do
Leave a comment on this post describing how much you’re saving with this tip. Each day, I’ll ask you to post how much you’ve saved cumulatively. Use this as a way to track your own progress (it will also encourage others to join)

If you liked this tip, check out my Premium tips — one long, tactical tip per week. Save money or get a 100% refund.


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  1. We’re already doing this (and yesterday’s tip as well). Our heat isn’t on right now since it isn’t too cold out, but I did run it for a few hours a couple of days ago when we had chilly temps.

    We have a programmable thermostat and keep it in the low 60s at night, and the upper 60s during the day. If we’re not going to be home, we lower it to about 62 or so.

    Also, each winter we seal our windows with foam and plastic to help keep the chill out.

    Last month, our electric bill was $48 and I expect it to be maybe $10 more this month, if that.

  2. So far I’ve saved $0, (I telecommute, so don’t pack a lunch, and my landlord controls & pays for the heat), but I’m excited for tomorrow’s tip, I’m sure some of them will apply to me!

  3. It might be worth it to invest in a programmable thermostat as well. That way you can set it and forget it.

  4. This is something that my family readily does and we have discovered the difference that it makes. We live in the Northeast in a very cold, snowy area. We pre-pay for our fuel oil–it is still $4.39 a gallon. Ever since moving to this part of the country, we have a rule that we only use our heater/boiler from November 1st to April 1st–unless there is a danger of the pipes freezing. Even then, we never have it higher than 65 degrees and when we are all out of the house we either turn the heat off completely or turn it down to 50 degrees. If you come over to visit, you better be prepared to put on your slippers and sweatshirt.

  5. I always turn down the thermosta before going to bed as well as before leaving for work each day!

    I think that this year I will invest in a programmable thermostat as well.

  6. Tip #1 will save me $180 this month but it will be hard to predict how much #2 will save, I’m guessing we can save another $20.

    we have a programmable thermostat and like it really cold when we sleep, we take it down to 64 at night and during the day when we’re not home. We have it at 71 when we are awake and home. I think I will take it down to 69 when we are awake and then 60 at night. we have tenants who live in the basement and we don’t want to have it too cold for them as they are often home during the day when we are not. Also the weather is very cold here and often unpredictable, we sometimes spend $400 a month to heat the house (we are in central Canada).

    Hopefully this will save a few more bucks this month (although I suspect the biggest savings will be in the really cold months of January and February)

    Thanks Ramit! You are doing a great job, of course not all 30 tips will apply to everyone but it is still a great FREE service you are providing.

  7. I rarely eat out anymore, and the times I do it is really a treat to be with my former coworkers (and not eat at my desk!). So, tip number 1 is saving me $0. That said, my spending this month on non-grocery-store-food was ~$130 ( LOVE for budgets!), and I’m going to attempt to bring that down to $100.

    I am lucky to live at home with my family, where I get food and heating and electricity and internet for a low low price every month. So, this tip would do me no good – however, we did this in college when we had to pay for our heating. Since we had very little money, we would keep the heat down, to the point where I had 5 blankets on my bed at night. At least our heating bill stayed low!

    Watching for more tips! Thanks so much, Ramit – this is a fantastic feature!

  8. I also have a programmable thermostat in my apartment, so since I had to set the time anyway today, I set the new schedule to heat only between 7:15-9am and 5pm-11:15pm on weekdays (and all day on weekends). The heat turns off completely during the unoccupied periods. I gain a lot of radiant heat from apartment neighbors and the sun, and I have efficient appliances, so my electricity bill is pretty low all year.

    I can definitely benefit from making more of my own meals (food is one area I’ve been splurging on in recent months). I just spent $32 at Whole Foods on food and snacks, went home and made myself gourmet scrambled eggs and toast for brunch, so I think I already saved myself around $15!

  9. These will not help much with the $1000 challenge, but here are some other pretty basic tips help in the “home energy” department…

    Tip #1: Not home? Turn it off!
    Furnace, AC… it doesn’t matter which, if you aren’t home you don’t need it on. I also turn off my furnace off at bedtime, a quality warm blanket does wonders.

    Tip #2: Check your insulation!
    When renting a house in San Diego I noticed the attic had no insulation… that 1950’s building blunder cost me a fortune every winter and made for a misserable summer with no central air. Check your attic, walls, and don’t forget the windows! Old windows = massive energy leak.

    Tip #3: Go digital!
    It’s hard to believe that a $30 gadget from Lowe’s can literally change your everyday living. A digital thermostat means you will rarely need to tap the dial. Take the time to program it according to your needs and habits, you will thank yourself later.

    Tip #4: Decorate your windows!
    I’m not talking snowflake decals for Christmas, I’m talking heavy/thermal curtains to keep the weather out and the comfort in… plus they look pretty. I just picked up 4 10′ panes for my office from JC Penney for $100, it may take a year to recoup the costs but they will pay for themselves, plus they add comfort and style.

    Tip #5: Don’t forget the water heater!
    Turn it down to 120 degrees, that’s all you need… remember, the water heater is running non-stop to keep your warm toasty. If your water heater is old, wrap an insulation jacket (less than $40) around it or better yet, replace it with a tankless system if it’s in the budget.

    Five easy tips to prepare for winter weather. Come spring, there are as many or more tips to fight off the rays.

  10. I live in S. Florida, and my recent August electrical bill was about $300 dollars. I replaced my thermostat with a programmable one. I also set my temp to about 83 degrees when not home. It is programmed to go to 79 degrees when I am home. I also have a pool, which requires me to run the filter at least 4 hours per day. I recently replaced the pool pump and noticed that my electrical bill went down as well. With all these changes, my Oct bill was $188. I saved about $100 in one month. It also helps that we had a cool front come thru. In the summer months I know my bill will probably go back to about $300, but at least now I am saving.