3 Ways a Smart Thermostat Can Save You Money

To paraphrase the infamous quote, sometimes you need to spend money to save money. In this case, I'm talking about upgrading to a smart thermostat.

A long way from the manual thermostats of yesteryear, smart thermostats are wifi-enabled, AI-powered, talking digital thermostats that can slash your energy bill. Here's how.

1. More efficient use of energy

My old manual thermostat meant that every time I left the house, I needed to remember to turn the thermostat down (in the winter, up in the summer) so I wasn't heating a house I wasn't even in.

Any guesses to how often I forgot? Yep, at least that often.

Sure, a simple programmable thermostat can help. But they're not only a pain to program (just setting the time is annoying, let alone actually programming them), but they also are limited in how many temperature changes you can program.

My smart thermostat lets me fine tune my settings so it exactly matches my needs. It also learns; if I wind up turning it down around the same time every Thursday, for instance, it will learn this habit and start adjusting on its own (provided you enable this feature).

Additionally, smart thermostats come with mobile apps. This means I can adjust my thermostat from anywhere. Out to dinner and forgot to turn it up/down? Handled. Coming home early and want a warm welcome? Done!

2. Smart energy incentives from your power company

Many large power companies have introduced various smart energy programs. Essentially, when you opt into these programs, you give the power company permission to adjust your thermostat settings before and during high-demand events.

For instance, energy use tends to spike in the evening when most people get home from work and turn their HVAC on. If your area is expecting a drop in temperature, that power use can get even worse. During these high-demand events, the power company may pre-cool your home an hour before demand rises, then boost your thermostat a few degrees for a few hours.

Since many power companies charge more money for power used during high-demand periods, this action alone can save you money on your power bill. But that's not all. You'll also be eligible for a sign-up bonus, typically $50 to $75, plus an annual incentive -- usually $20 to $40 a year -- for being enrolled.

3. Early detection of HVAC or moisture problems

"An ounce of prevention is worth a pound of cure."

Pretty much any problem with your home is 100% easier to solve when you catch it early. The longer it goes on, the worse the damage gets -- and the more expensive it is to fix.

(FYI: Your homeowners insurance will cover damage from sudden and catastrophic problems, like a pipe that bursts. However, it won't cover ongoing leaks or problems from wear and tear.)

Smart thermostats are opening up a wide world of diagnostic capabilities. For instance, my thermostat itself includes both a carbon dioxide monitor and a humidity sensor. It also has external sensors I can put around my house to get temperature and humidity readings from every floor.

If there is a sudden increase in humidity, drop in temperature, or spike in carbon dioxide levels, it will send me an alert on my phone. I can then address the problem right away.

Saving on smart thermostats

Although smart thermostats can definitely be a sound investment in energy savings, that investment can be costly. New smart thermostats can easily reach up to $200 for top-of-the-line units (and the extra sensors can add up quickly, too).

If you're of a mind to upgrade, be sure to check with your power company first. Even if it doesn't offer a smart energy incentive program, most power companies have some sort of discount or rebate for the actual smart thermostat purchase. This could knock $50 or more off the price.

You should also choose your payment method wisely. Select the best rewards credit card for your purchase. For instance, if you're buying from the hardware store, choose a card with bonus rewards on those purchases. If nothing else, choose a 2% cash back card that will offer good rewards no matter where you buy.

Keeping energy costs down can do wonders for your personal finances. While a smart thermostat isn't for everyone, it can be a great way to save money for many folks.