As the Texas summer is fast approaching, one of the things I’m worried about in my home is my electricity bill. First of all, I have a 23 year old AC unit that isn’t nearly as efficient as newer models. Secondly, I have 23 year old aluminum frame windows that do very little to keep out the crazy Texas heat.
While I’m just hoping the AC units survive so I don’t have to replace them, I had a unique opportunity to do something about the windows.
I had a company knock on my door and offer discounted windows in exchange for my home being a “marketing home”. That means they are going to market their product in my neighborhood and tell people to go look at my house for an example.
I got a competitor’s quote and this program is legit; I’m definitely getting a great deal! I’d tell the price and specifics, except part of my participation in the “marketing home” deal is that I don’t disclose the price.
So how am I paying for brand new energy efficient windows when I’m trying to save up for a wedding?
I’m Using a Balance Transfer on a Credit Card
One of my credit cards that I don’t use (and haven’t used for years) offered me a balance transfer at a 0% interest rate until January 1, 2014. There is a 3% balance transfer fee and they send me a check directly.
Let’s pretend I’m spending $5,000 on new windows and will take a balance transfer for that amount. The 3% fee means I’ll owe $5,150 when I pay back the loan, and then I’ll pay 6.99% APR on any balance left over after January 1st of 2014.
I hope to have it paid off before I pay any interest, but 6.99% is a low enough rate that I’m not opposed to paying interest on a small balance, especially when you consider how much money I’m saving in energy costs (which will be way more than the interest at 6.99%).
How I’m Saving Money on This Transaction
The great thing about a balance transfer where it’s more like a cash advance (they send me a check) is that I can put the purchase on a credit card and get rewards, then just use the balance transfer to pay off my credit card. I have a card that gets 2% back on all purchases, so I’ll get $100 in rewards when I pay for these windows.
That effectively makes the balance transfer fee only 1%, or $50. So how am I going to save $50 over the next 9 months? Easy. According to a University of Minnesota study I will save at least 23% of my cooling costs with these new windows. Considering how expensive it is to cool homes in the Texas summer, I think we are talking about at least a few hundred dollars a year.
I can also get a $200 tax credit for installing new windows from the federal government according to the Energy Star government website.
Finally it’s important to consider the increase in my home’s value. Angie’s List says I should get at least a 70% return on investment for new energy efficient windows, but that’s for people who are paying full price. When you consider the fact that I’m paying much less than a non marketing home would have paid (remember I did comparison shop and this really is a killer deal), I could see a 100% or more ROI when I go to sell.
Spending Money Never Saved So Much
I’m getting 2% of the purchase price back in rewards, saving hundreds of dollars in energy every year I live in the house, getting a $200 tax credit, and raising the value of my home by about as much as the cost of the windows.
That’s what I call a darn good deal!
This definitely isn’t our forever home, so we will be looking to sell it in the next few years after all our renovations are complete. I do fully expect to get all this money back when I go to sell.
Now I just need to find someone who is willing to buy a house with a 25 year old AC unit!
The windows get installed next Monday, so I’ll post pictures when everything is finished.
Readers: Have you ever done home renovations that saved money on electricity and/or drastically increased the value of your home? How did you take out a loan to pay for them?