Worked Examples
Theory is good, but seeing the numbers makes it real. Here are a few concrete examples of how the strategies we’ve discussed can translate into tangible savings and a more secure budget. These are illustrations; your own savings will depend on your local utility rates and lifestyle.
Example A: A $40 Monthly Electric Reduction
Let’s return to Susan. She decides to tackle her electric bill. She identifies three key areas for improvement. First, she replaces the five most-used 60-watt incandescent bulbs in her home with 9-watt LED equivalents. These bulbs are on for about four hours a day. Second, she puts her TV and cable box on a power strip and turns it off completely for 20 hours a day when not in use. Third, she commits to washing her four loads of laundry each week in cold water instead of hot.
Let’s do the math, assuming an electricity cost of $0.15 per kWh.
LED Bulbs: She saves 255 Watts (5 bulbs x 51W savings each). Over a month, this is about 30 kWh, saving her $4.50 per month.
Power Strip: Her TV and cable box used about 20 watts on standby. Cutting this for 20 hours a day saves 12 kWh per month, for a savings of $1.80 per month.
Cold Water Laundry: Heating water for laundry is a huge energy draw. Switching four loads per week from hot to cold can save over 200 kWh per month. This adds up to a massive $34.00 per month in savings.
Total Savings: By combining these simple, no-sacrifice changes, Susan reduces her monthly electric bill by approximately $40.30. That’s nearly $500 back in her pocket over the course of a year.
Example B: A Revised Budget After a Rent Increase
Unfortunately, Susan receives a notice that her rent is increasing by $100 per month, bringing her total to $1,200. Her fixed income from Social Security remains at $2,200. Instead of panicking, she revisits her budget. Her new fixed expenses are $1,625, leaving her with $575 for variable costs and savings. She knows she can’t compromise her sinking fund or essentials. So, she decides to find the $100 within her variable spending. She aims to cut her grocery bill from $300 to $250 by using more coupons, buying store brands, and taking advantage of senior discount day. She also reduces her personal/entertainment fund from $50 to $25. This covers $75 of the increase. The remaining $25 comes from the utility savings she achieved in the previous example. Her new budget is tight, but it is balanced, and she is still saving for the future.
Example C: Payback on a Low-Flow Showerhead
David enjoys his daily 10-minute shower but notices his water bill has been creeping up. His old showerhead uses 2.5 gallons per minute (GPM). He buys a new EPA WaterSense-certified showerhead for $20 that uses only 1.5 GPM. Let’s calculate the payback.
Water Saved: He saves 1 gallon per minute. For a 10-minute shower, that’s 10 gallons per day, or 300 gallons per month.
Cost Savings: Let’s assume his combined water and sewer rate is $0.02 per gallon. By saving 300 gallons, he saves $6.00 per month on his water bill. He also saves money on the energy used to heat that water, which could be another $2.00-$4.00 per month.
Payback Period: The new showerhead cost him $20. With a savings of at least $6.00 per month on water alone, the fixture pays for itself in just over three months. After that, it’s pure savings, month after month.
