Money

How I made $3,479.72 in an hour

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How I saved 3479 dollars in an hour

If you are new here, then let me introduce myself. My name is Raz and I am constantly chasing the ways to save money even if it’s few pennies at a time.

I have looked into every aspect of my expenses to optimize them in a way that there’s no leakage at all. Any kind of wastage is an act of brutal crime for me.

Over the years I have worked very hard to save a reasonable amount of corpus and build some recurring sources of income through my act of frugalness.

I constanly try to teach my kids the importance of saving and living a life without causing too much of wastages.

As a kid, they get to use lots of paper for school activities requiring cutting sheets of papers to create master arts. I understand this is all required to help a child grow and bring his/her creativity out so I don’t stop my kids doing it. But it’s my duty to help them think about how to use their resources intelligently.

Thats the whole purpose of me being frugal and strictly watching for wastages.

Recently I realized how much electricity water heater was consuming during winters because it’s constantly running due to cold weather outside.

Everytime someone opens a tap to wash hands or dishes, a portion of hot water is drawn from water heater and is replaced by ice cold water.

This triggers a chain reaction where everytime someone is drawing hot water from water heater, new ice cold water is going inside the water heater leading it to constantly running throughout the day.

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When I checked the installation date of this water heater at home, it’s from 3/25/2010 which is almost a decade old now.

water heater consuming huge electricity kwh

The energy rating is painfully displaying the amount of electricity (4,825 KWh) this water heater will consume over a year.

At today’s KWh rate in the area this is about $675.50. That’s about $56.25 per month.

On a side note this one simple DIY trick will save me $6073 over time.

So, in a month’s electricity bill, about $56.25 are just for heated water supply at home. This is insane considering I am trying to bring my monthly electricity bill under $100 for a 950sq ft condo.

Do we really need boiling water to come out of taps?

Not just at my home but even at my relatives and friends, I have noticed that moment you turn hot tap on, hot boiling water starts flowing.

Often you have to compensate the heat by mixing some cold water into it.

A while ago I noticed this an act of wastage too. Think about it. First we boil the water in a water heater and then mix it with colder (regular temperature) water to bring the overall temperature down to toleratable degrees.

It was clearly an act of waster for me and the moment I understood this couple of months ago, I immediately jumped over to check the temperature at which water heater was set at my home.

It was set at 140 degrees Fahrenheit which was way more that our hands or body can tolerate. For god sake, I could make my green tea directly from water heater without using a stove.

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There are 2 temperature sensor knobs in the heater I have at home. It wasn’t difficult to set the temperature to more reasonable levels.

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There are 2 thermostats in water heaters – upper and lower.

Using screw driver, I opened the lower thermostat cover and removed insulation. Then using a flat head screw driver, I turned the thermostat knob to 120 degrees F, which is more reasonable for my house. I can always come back to tweak it later.

Then I unscrewed upper thermostat and set it to 122 degrees F since it has to be a little higher than the lower thermostat. That’s it. Next task was to wait for electricity bill to come next month since I did it in first week of the month, I still expected to see bill drop for next 3 weeks.

I was desparately waiting for electricity bill next month and the day it landed into my mailbox, I was impatient to open it and check if I saved anything.

This month, the electricity bill had dropped to $145 per month from $167 per month average over 6 months.

The best part was that I hadn’t changed any other thing in the house as far as electricity consumption was considered. In fact, we had stayed more at home this month, so the consumption should be on higher side compared to other months.

So, just dropping the temperature by 20 degrees Fahrenheit, I could save about $22 in 3 weeks time ( ~ $28 in 4 weeks ). That’s a great saving for the little amount of effort put into it.

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Related: There are many cheaper alternatives to regular TV which can save you a ton of money.

Now about the title of the post. You might be wondering how did I come to a saving of $3,479.72 from mere saving of $28?

One word answer is ‘compounding’ my friend. With $20/month saved on average (in summers water heater will not run as much though) in electricity bill due to water heater thermostat setting, yields about $3,479.72 at 7% (historical equity returns) for 10 years.

The whole process took me less than an hour to finish and with savings in; I will have more dollars to invest for the future. This is one of the easiest saving trick that I have discovered so far apart from my other trick about generating $5000+ in cash returns from credit cards without putting a single purchase on the card.

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How I saved 3479 dollars in an hour

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