How to keep your house warm and save money

Winter can easily become the most expensive time of year for your utility bills as you try to find a balance of keeping your house warm and toasty without spending your life savings.  As we built our own house, we had the luxury of being able to make our house “heat efficient” to help keep our electric bills down.  While our summer electric bills can be high here in the mid-South, winter has normally been more expensive in our opinion.  These are some of the ways we keep our house warm and save money.

Our House

As a full disclaimer, this is the first winter we have spent in our house so we do not have a full picture of how our winter utility bills will be yet, but, I will be sure to post an update when Spring arrives!  We live in East Tennessee so we are blessed not to have the extreme heat that our friends in Georgia and Florida know all too well and we are also far enough south that we do not get the privilege to weather a New England nor'easter or Midwest blizzard.  But, these tips apply to any place where it can freeze.

Our house is 2700 sq ft. of living space that we heat and cool on a daily basis.  We are 100% electric (no gas or geothermal).  We also have a walkout basement (1500 sq. ft)  that is a ballet studio that we heat and cool two days per week.  I will try to avoid only relating to our electric bill costs in dollars because Tennessee electric rates are notably higher than most other states as we pay anywhere from 10 to 12 cents per kilowatt hour depending on the time of year.

In the “dog days of summer” with many 90+ degree days, we used 1,061 KWH.  Earlier this fall, when the temps were near perfect and we had the windows open most days, we used 660 KWH.  Essentially, half of our electric bill is from our heating and cooling costs.  For the past month, we have run the heat mostly in the evenings and we consumed 744 KWH when it gets to the low 30s or upper 20s at night.

Good Insulation & Good Windows

The quickest way to reduce your utility bills is by having a high-quality exterior house frame.  Of course, this means spending money.  But, if you do not spend it at the beginning.  You will spend even more in the future in the form of high electric bills.  Money will figuratively be flying out your windows and roof.

If you live in an old house, be sure to set aside some money for good windows when it comes time to replace them.  New windows and installation can easily be as high as $10,000 for a larger house.   Technology has come a long way so you will be surprised how much less draft will be in your house.

how to keep your house warm and save money
Our double hung single pane windows

Another area we decided to lay out some money was insulation.  Primarily in the attic.  We had our attic spray-foamed with an average depth of 5 inches, it doubled our original cost projection.  But, it has made a noticeable difference so far in the temperature of our upstairs.  As it was sprayed during the summer, our upstairs went from the stifling hot & suffocating attic feeling to only being a few degrees warmer than the downstairs.

Our exterior walls have about 1 inch of spray foam and R-15 fiberglass insulation.

So far this winter (it was an unusually warm fall), we have only had a handful of hard freezes so far.  But, our house is still pretty consistent.

Ductless Mini-Split Systems

Another experiment with our house is the installation of mini-split heat & cool systems, instead of a traditional central HVAC system.  We decided to go with a mini-split for several reasons:

  • More hygienic as the air
  • Less energy loss than central HVAC that lose up to 30% of handled air in ducts before getting to vents
  •  Only heat or cool rooms occupied
How to keep your house warm and save money
One of our Carrier ductless mini split systems

I mentioned earlier that mini-splits are one of our experiments.  This is because they are popular in Europe, where most houses were built without ducts.  These are basically an improved & more efficient version of window units that you might find in a hotel room.  But, they are getting more popular in commercial settings.

If you are unfamiliar with how mini-splits work.  There is an outdoor condenser like a regular HVAC unit, but you can connect several indoor boxes to one exterior unit.  For us, we have three units on each level (not including the basement), but, only two outdoor units.  Our basement has two indoor units and each has their own outdoor unit due to the size of our two rooms.

Regarding our living space, we put one indoor unit in the common area on each level and one in each bedroom.  If you do the math, we have 4 bedrooms and 2 living rooms.  This means our closets and bathrooms do not have any vents, but, we figured the bedrooms and common areas are where we spend most of our time.  There's a few degrees difference, but, we tried to design our floor plan with this in mind to help maximize airflow.

So far we think they have helped us save money.  We currently have 4 bedrooms with the intention of filling them up with children in the coming years.  Until then, we normally only run one unit on each level.  It keeps our house warm enough in the mid-60s.

Regarding installation costs, our whole cost was about $12,000.  It was about the same price quote for a central HVAC.  We decided this was a more cost-effective option for our situation, and, the indoor HVAC unit would have been in the attic.

Ceiling Fans

This is more of a public service announcement.  But, I enjoy running the ceiling fans in the summer and winter.

During the winter, running them counter-clockwise will help force warm air down.  This helps you keep the thermostat set a degree or two lower and prevents the heater from turning on & off (where most energy consumption occurs).

Wood Stoves

We had waffled back & forth a little about this idea and decided to go forward with it.  A wood stove or fireplace can be a great way to reduce your electric bill.  Wood stoves come in many shapes and functionality.  We opted for a cook stove from Kitchen Queen as it gives us the option to heat our house and cook if the power goes out.  You can also just get a stove that simply heats, but, we know several people with this brand & they love it.

Our Kitchen Queen 480
Our Kitchen Queen 480

We just had our first fire last week, so I plan to write about our experience in the future.  I will say, my wife & I are talking about installing a floor grate in between our two levels to make it easier for the heat to rise.  When we stoke the fire, it easily gets our main level to 83 degrees when it's 25 degrees outside.

Having a wood-burning stove means you need to spend time and money to cut & store wood, but, it can be worth it.  This year, we will be buying seasoned wood as we spent every moment of the past year building two houses, but, I plan to start accumulating for next year now that the temps have dropped and wood cutting isn't as exhausting.  We are excited to use our stove for years to come.

We were able to pickup our stove locally so we didn't have to pay shipping costs.  But you can expect to pay about $2,500 for a black Kitchen Queen.  If this doesn't float your boat, there are other brands available & you can always check Craigslist.


These are some of the ways you can help save money on your winter bills, besides turning the thermostat down a few degrees, dressing in layers, or buying window treatments from Lowe's.

How do you save money on your winter utility bills?





Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.