How to Save $200 a Month with Smart Home Products

Left hand holding a tablet displaying different icons and the right index finger trying to press one of the icons.

These home tech products aren't only good for housekeeping convenience - they can even save you money!

Visited a consumer electronics store or home center lately? You probably noticed the burgeoning amount of floor space devoted to smart home products, the so-called Internet of Things (IoT) for the home. It’s amazing what you can get these days -- do-it-yourself security systems that record intruders, monitors that tell you when you left the garage door open, cameras to watch the baby when you are at work. The devices have evolved from curiosities into useful things. They don’t just push you alerts. They close water valves when there’s water on the basement floor. They allow you to open the front door remotely for a service person who comes to repair the dishwasher.

The most successful smart home products save you money. They lower your water bill, reduce heating costs, eliminate the need for security service, or cut your cable bill. The next most popular have your back; they reduce the probability of big, unexpected expenses – like property damage from a leaking hot water heater, a thief stealing a package from your front stoop, or a hacker assuming your identity. If you added up the monthly benefits of these small investments, it’s easy to imagine savings north of $200 a month. Most devices are cheap enough that they pay for themselves within a few years.

All this assumes that you have a strong wi-fi system and a smart phone, a pretty safe assumption these days. The average wired household has an average of 8.6 connected computer, mobile, and entertainment devices, twice the number they owned eight years ago, according to research from Parks Associates. Yet only 18 percent of people own a home automation device. Smart thermostats, a great point of entry since they immediately cut your utility bills, lead the way. To go all in on these devices, you need good working knowledge of your home’s electrical, HVAC, water, cable, and Internet systems. But the instructions and support (both online and by phone) keeps improving as well. If you can set up a computer, you could probably install a smart home device.

I’ve installed many of the products myself – or had tradespeople put them in when they came to the house for another reason. I wanted to make sure they were worthy before taking them to consumer home shows across the country as part of a Life-Changing Products exhibit. I’ve found what really piques people’s interest in a product is its potential to save them money. Let’s take a look at the potential savings.

Entertainment

This is a big one. It’s the reason why cable and satellite TV companies are running scared. With the purchase of a smart stick, you can stream live TV and a package of basic cable channels to any television for only $40 a month. That compares to the $85 a month charged by cable television companies and $100 a month for satellite TV, according to Leichtman Research Group. The sea change occurred a little over a year ago when YouTube lined up deals with local network affiliates; now you can stream the local news and football games. Cable and satellite TV still offer many more channels. But many people are fine with a basic package that they can supplement with Netflix or MLB.com.

Most services allow you watch programming on any device – without having to pay the cable or satellite company for a new box each time you want to connect a new TV. You can even share the account with multiple users. YouTube TV, for instance, allows you to share the account with five family members, even if they don’t live in your home.

Savings: Let’s claim $45 in monthly savings for this one, though the savings would run much higher if we added the expenses of multiple family members.

Water

One of my favorites new products is a smart sprinkler system. As much of 70 percent of residential water is used outside, mostly to water the lawn, according to EPA estimates. Water is wasted when sprinklers go on even when the ground is saturated or rain is on the way. I installed one of the first smart sprinkler systems, Iro from Rachio, on my home so that I could test it. The $180 box connects through your home wi-fi system to National Weather Service information. It skips a scheduled watering when rain is on the way. It creates a customized watering pattern for your lawn based on your zip code.

The system also automatically changes your watering pattern by time of year, based on where you live, in case you forget. And sensors in the ground – the system can support up to 16 zones -- notify the controller when the lawn doesn’t need watering. The controller can be connected to sprinkler systems from other manufacturers. The average family of four using 150 gallons a day spends about $112 a month for water, though bills can be much higher in regions with water scarcity. Rachio reports that it can save homeowners up to half of their monthly water bill for the lawn

It's harder to quantify the savings from leak-protection devices. They sense a water leak, or when water is on the floor, and shut off the water valve. A small drip can cost you $14 a month, according to New York City’s Environmental Protection Agency, and a steady drip $70 a month. When a hot water heater leaks, or a washing machine overflows, it may cost thousands of dollars to replace damaged floors and walls. I’ve fielded quite a few horror stories from homeowner stuck with big bills that insurance didn’t cover.

Savings: Flo, which makes a whole-house leak detection device, estimates it system can save $256 a year, or $21 a month. Rachio’s smart sprinkler control produces $25 in monthly savings. That brings us to $91 in total savings.

Electric and Gas

This is a big bucket of money DOE estimates that the average U.S. family spends $2,200 per year, or $183 a month on energy bills. Nearly half of that goes to heating and cooling. The first place to attack that bill is a smart thermostat. DOE estimates that it will cut your bill by as much as 15 percent. Smart thermostats develop custom heating and cooling patterns around your schedule. Motion detectors tell them when no one is home; they automatically turn down the heat or air conditioning. Using an app on your phone, you can turn them back up before you get home from a trip.

One problem many smart devices attempt to solve is you have no idea what it costs to run appliances. I have an electrical monitoring device installed on my electric box at home. It cost me about $200; an electrician installed it when he was at my home to do something else. Within a couple days the monitor not only forecasted my electric bill for the month – think about that for a moment, you have no idea what you’ll pay for electricity in any given month – but it told me how much I was spending to power equipment that was always on. This is your so-called phantom power load, which DOE estimates represents about 10 percent of your average $110 monthly electric bill.

Electrical monitoring devices alone don’t save you money; you have to take action on their findings. Sense, which also makes an electricity monitor, is conducting a pilot program with 200 Vermont Households to see how they respond once they know the electrical consumption of key appliances. It’s working with an advocacy group that encourages homeowners to cut electric consumption, to record “personal bests.” In the first six months, households saved more than 8 percent, or $100 per household. Energy Circle, which studies energy efficiency, says the savings may be double that: 15 percent.

One way to reduce phantom power consumption is to unplug appliances when you aren’t using them. Some appliances you would never shut off – like the refrigerator or the cable box. But you can connect others to a smart power strip that allows you to designate some that are always on and cut power to other others – like TVs and speakers. Connecting appliances to a smart plug in the wall, or networking them to Amazon Alexa, Google Assistant, or Apple’s Home Kit, allows you to turn them off remotely from an app on your phone. You can also put the appliances on a schedule so that they turn off automatically when you leave for the day.

(A quick aside: Some of these smart plugs are getting really smart. One from Jeeo monitors the electrical use of the attached appliance. Another under development by Whisker Labs checks your electrical system for potential fire hazards.)

Lighting, which accounts for about 12 percent of the average household’s energy bill, according to DOE, are low-hanging fruit. Most smart lighting systems employ LED bulbs that use 75 percent less energy than incandescent counterparts. They can be easily connected to an app that turns them on or off according to a preset schedule. Timed or motion-sensitive lighting can save you $100 per year, or $8 a month, say manufacturers of the system.

Appliances are getting much smarter in how they use electricity too. For instance, you can buy the Frigidaire Cool Connect smart window air conditioner that will stay within your budget. If you tell it you only have $100 a month to spend on cooling this month, it will stay within your budget. Smart window coverings – a basic kit costs about $100 -- close automatically when your windows heat up. You can even buy smart vents that, for only $90, allow you to regulate temperatures by room; they will block hot or cool air to areas that don’t need it. And upgrading to Energy Star appliances, which could result from knowing how much each one costs to operate, will save you 35 percent on your energy bills.

Savings: A smart thermostat produced $27 in monthly savings. If we split the difference on the forecasted savings from an energy monitor and take 12 percent, that another $9 a month, bringing our total to $127. Let’s play it safe and say we upgrade to two Energy Star certified products that produce $14 in monthly savings. (upgrading everything in the house would net a whopping $64 in savings.) We'll take $8 a month in savings from more efficient lighting. That brings us to $149 in total savings so far.

Groceries


This is a relatively new frontier with big potential savings. The average household spends a little more than $4,015 on food each year, according to the U.S. Bureau of Labor Statistics. An average of 16 percent of this food is wasted, according to a survey by the American Chemistry Council, often because we bought more than we needed and it went bad, or because we didn’t get around to eating it before its freshness expired. That works out to about $53 a month spent on food that’s thrown away.

Smarter, the maker of Fridge Cam, says its device can cut that waste in half. The $100 Fridge Cam goes in your refrigerator and tells you when you are out of milk, eggs, or cheese. The camera sends images to an app on your phone so that, while at the grocery store, you could look inside the fridge to see what you have. In that way, you won’t buy vegetables, fruit, and meat that you don’t need. The app will even send you an alert if you are out of something and happen to be passing your favorite grocery store. No more return trips to the grocery store because you forgot to buy something.

Several other smart devices for the kitchen aim to reduce waste. Smart frying pans connected to apps ensure that you don’t use too much butter, flour, or wine to make coq au vin. They even tell you the precise time to add the ingredients. The June smart oven uses AI to see what you put inside and cook it perfectly each time. Several companies now market fast composters that turn vegetable waste into useable compost in short order. This could save you money if you have to pay for curbside trash pickup.

Savings: Let’s assume you aren’t a wasteful cook and just take the $26 a month in savings on food waste from the fridge cam alone. That brings us to $175. We’re almost there.

Security


The analysis is going to assume that you’ve gone all in on security. About 20 percent of homeowners have a professionally monitored security system that costs them an average of $30 per month, according to Consumer Reports. Now you can buy do-it-yourself systems connected to the cloud that take that cost down to zero. You can install cameras outside your house that take video of intruders and detectors on windows and doors to send you alerts. You may still have to pay to receive alerts and store video footage on the cloud.

There isn’t much to be saved on equipment and installation, if you compare apples to apples. ADT, the biggest security company, charges $499 to install ADT Pulse with Video. It might cost just about as much to install a do-it-yourself system, according to Consumer Reports. You may need more sensors and cameras than what comes with a starter kit.

Savings: Let’s take $15 a month in monitoring fees, bringing us to $190.

Insurance

Insurance companies have taken notice of these devices. You may be able to score a 10 percent discount on your homeowner’s insurance for a home security system with monitoring and alerts. Actual savings depend on the level of monitoring and your home’s location. Many insurance companies, hoping to get an edge in a competitive market, encourage you to talk with an agent about what you’ve installed. They want to hear, in particular, about devices that will prevent water damage, fire, and break ins.

Liberty Mutual offers discounts to homeowners who install smart home products, specifically smoke and carbon monoxide detectors and smart locks. Smart phone alters, they reason, give you time to race home and prevent damage. Allstate says it offers home security discounts ranging from five to 15 percent; it’s focused on apps that alert homeowners of fires or break-ins, and flood prevention systems. Chubb offers smart tech discounts up to 7 percent for whole-home water shut-off devices.

Savings: Average homeowners insurance policy costs about $1000 a year, or $83 a month, according to several sources. A monitored security system could knock $8 off that payment, though you may have to pay more in monitoring fees to get the discount. Smoke detectors connected to your phone, locksets that warn you of a break-in, and leak detectors that automatically shut off the water should be good for at least another $2 a month. That brings us to the magic number of $200.
Boyce Thompson is the author of three books – Anatomy of a Great Home, The New New Home, and the forthcoming, Designing for Disaster. For 17 years, he served as the editorial director of Builder magazine.

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