Save on Services and pay your home off faster

July is Savings Month and reminds us that we all need to keep looking for more ways to cut our living costs and save. But did you know that making your home more energy and water efficient will not only help you reduce your municipal bills but could also help you pay your bond off sooner and save many thousands of Rands in interest?

July is also the month every year when most municipalities increase their water and electricity tariffs, and this has a negative effect on most household budgets, so it’s not surprising that homeowners and buyers are increasingly focused now on all sorts of ways to reduce these costs, including LED lights, ceiling insulation, energy-efficient appliances, solar geysers, generators, solar panels and wind turbines.

And the really good news is that these ‘green’ choices can also help you to become bond-free in much less time than you originally thought.

The way to do this is to use at least some of the savings generated from energy-efficient living to increase your bond repayment every month, or to make an additional bond payment once or twice a year.

For example, if you were able to cut R500 a month off your electricity bill and add it to your bond instalment, you could pay off a bond of R1m (at an interest rate of 10,25%) in just over 17 years instead of 20 – and save R221 000 worth of interest in the process.

And such savings are in fact not that difficult to achieve if you add up all the ways that you can reduce electricity and water consumption from the municipal grid. For instance, just replacing 10 incandescent bulbs around the house with LED lights would save you at least R1350 a year in electricity consumption. And even though these bulbs are somewhat more expensive to start with, they typically have a lifespan of about 12 years (as opposed to four years for CFLs and six months for incandescents) so you won’t have to pay those costs again for a long time.

“Green” ceiling insulation made from recycled paper or plastic can significantly reduce the cost of heating and cooling your home, which accounts for a large percentage of your electricity bill, and you can make further savings by steadily replacing your old appliances with energy-efficient models.

To make things even easier, the Department of Energy recently introduced a new energy-efficiency labelling standard for new appliances sold in SA – and a cellphone application which allows consumers to calculate and compare the estimated annual running costs of any labelled appliances before they buy them. (See https://app.savingenergy.org.za/).

Then to save money on water, your best move is to install rainwater tanks – or buy a home which already has them installed. If you also implement water-saving measures in your home, it is quite easily possible to consume less than 100L per person per day, while about 2000L can be harvested from the average roof in an hour of moderate rainfall.

And talking of water, the geyser is probably the single biggest power-gobbler in the house, accounting for approximately 30% of the average electricity bill, so of course it makes sense to replace it with a solar geyser as soon as you can afford to do so, and let the sun heat all your hot water for free. Or better still, buy a home which already has a solar geyser, as many newly-built homes now do.

However, you can also achieve considerable savings through the simple expedient of turning your geyser off during the hours when there is no demand for hot water and investing in a geyser “blanket”. Geysers only need to be on for about two hours to produce piping hot water which will stay hot for many hours if it is properly insulated.

Generators are useful during load-shedding but won’t really help you save money to put into your bond account because of the high cost of the petrol or diesel needed to run them. So converting to a solar power system with photo-voltaic panels and batteries is a better – and long-lasting – option, even though it is initially more costly.

On average such systems pay for themselves within 7,5 years, and that period gets shorter as electricity tariffs get higher and your other energy efficiencies kick in. What is more, your electricity bill will effectively be zero after that, and you can then put the whole amount that you used to pay the municipality, or most of it, towards paying off your bond.

If you have 14 years to go on your R1m bond, for example, and you then start adding an extra R3000 to your monthly instalment, you will pay off your house in exactly nine years instead, and save more than R353 000 worth of interest in the process.

What is more, you will substantially increase the resale appeal and value of your property by making it “green” and providing future owners with the opportunity to also save on utilities.