6 Tips to Save on Home Heating

Money-smart ways to heat your home safely The approach of winter brings a chill to homeowners and home insurance companies alike.

Homeowners feel the pinch in their pocketbooks from rising energy bills. Heating and cooling account for 56 percent of the energy use in a typical American home, according to the Department of Energy.

Home insurance companies take a similar hit from the estimated 54,500 home fires each year in the United States, one-third of which occur during January and February, causing an average of 190 deaths, 625 injuries and $286 million in property loss, according to the U.S. Fire Administration.

Despite the certainty of winter, many of us fail to take steps to save on winter heating bills and minimize heating-related home insurance risk.

"Most people don't really have a clue," says Kirk Lindstrom, vice president of operations for Building Energy Experts, an energy management firm near Chicago which conducts residential and commercial energy audits. "We focus on the building envelope. If it has a lot of holes in it, you've got issues."

Here are six money-smart ways to bundle up your home this winter, with cost-savings estimates by Building Energy Experts.

Insulation is your home's parka against winter's chill

Insulation is your home's all-purpose force field against high energy bills. It minimizes heat transfer in winter and summer, provides ventilation to control moisture and makes your home more livable.

Bringing your attic insulation up to code for your region is one of the most cost-effective ways to winter-proof your bear cave. The Department of Energy can get you started with its ZIP Code Insulation Calculator.

But before you blow insulation, be sure to seal all ductwork, plumbing and cable TV penetrations. Leaky ducts can account for 10 percent to 30 percent of heating and cooling costs.

"Most houses leak like sieves," says Lindstrom. "Attic access doors are one of the biggest offenders. By building an insulation dam around the scuttle opening and installing an insulated lid on it, you'll save big."

Cost: $500 to $1,000 to bring a typical attic up to code. Lindstrom recommends earth-friendly chopped cellulose, which is chemically treated to repel fire and insects and retains its loft better than fiberglass.

Savings: 20 percent to 30 percent off your monthly bill, with return on investment in as little as one year.

Teach your thermostat to tame the watts

Who says you can't change the weather? We alter the temperature inside our homes all the time with the press of a button or the turn of a dial on our thermostat.

But what many of us fail to do is "teach" our thermostat how to save us money.

You can save 10 percent on your winter heating bills by adjusting your thermostat 10 to 15 degrees cooler for the eight hours you're at work, according to the Department of Energy. Cut it back an additional eight hours when you sleep and you might save 20 percent.

Depending on where you live, that savings could pay for a new programmable thermostat in its first month of use.

"That's a no-brainer," says Lindstrom. "For $40 to $70, you can get a really nice setback thermostat that is going to last forever and you can program it any way you want. It's a big plus."

Cost: $40 to $70 plus installation.

Savings: 10 percent to 20 percent on winter heating bills.

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Dial back your hot water setting and soak up savings The Department of Energy estimates that water heaters account for 14 percent to 25 percent of our monthly energy bill. Little wonder, since most water heaters are on 24/7.

Water heaters are often factory-set at 140 degrees Fahrenheit, hot enough to scald. The Department of Energy says most of us can live comfortably with 120-degree water. You can save 3 percent to 5 percent on your water heating costs for every 10 degrees of setback.

To save even more, you can reduce hot water use with low-flow showerheads and faucet aerators, jacket the heater and wrap hot water pipes to minimize stand-by heat loss, and install a timer to take advantage of cheaper off-peak power.

"The quickest remedy is to set back your water temperature, but a tank insulator sleeve really helps a lot," says Lindstrom.

For greater savings, ditch the tank entirely and invest in an energy-saving, on-demand tankless water heater.

Cost: Free to adjust, inexpensive for attachments, $50 to insulate, $500 to $1,000 for on-demand systems.

Savings: 6 percent to 10 percent on water heating costs with 20-degree setback; 24 percent to 34 percent by going tankless.

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Bankrate.com is the Web's leading aggregator of information on financial products including mortgages, credit cards, new and used automobile loans, money market accounts, certificates of deposit, checking and ATM fees, home equity loans and online banking fees. Visit Bankrate.com to get the tools and information that can help you make the best financial decisions.