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How to make wise financial decisions about smart home technology

internet-of-things
July 13, 2016

By Thomas Muellner

Imagine you’re on your way home after a long day at the office. It’s 5:46pm, the time you typically head back on Tuesday nights, and the weather is unseasonably cool. Miles away, your A/C system switches on from standby mode, factoring both your preferred room temperature of 71 degrees as well as the night’s chilly forecast. As you pull into the driveway, the living room lights click on, activated by proximity to your smartphone. Soon after walking through the front door, unlocked by thumbprint, your Bluetooth sound system fades in playing the same track you were grooving to in the car. Welcome home!

Though TV shows like The Jetsons have fictionalized the future of home living for decades, the same technology that’s given us iPhones, cloud-based computing and countless other innovations is making the high-tech home a modern day reality. Flying cars aside, George and his family weren’t so far off after all.

But rather than simply being cool, savvy consumers are finding new ways to use in-home technology to save money and improve their lives. If you’re a homeowner, it may be time to consider how the best smart technology out there can improve your residence. 

Deciding where to start

Smart technology gives homeowners and renters alike the ability to be energy efficient and add an extra level of comfort to day-to-day life. However, you may not always meet both of those goals; sometimes home technology can be fun or useful, but not necessarily cost effective. 

From self-learning thermostats and smartphone-controlled lighting systems to low-flow toilets and timed power outlets, smart home improvement options are widely varied. Some products are simple innovations of existing fixtures, while others support total home automation.

Before investing in new products and solutions, think about what you’re hoping to achieve. Is the aim to make small, cost-saving updates, or are you looking to turn your place into a true state-of-the-art home? For newcomers, it can be easier to prioritize your smart home technology spending if you organize smart renovations into four main categories lining up to specific utility costs: 

     1. Heating and air conditioning (HVAC)
     2. Appliances and lighting
     3. Water 
     4. Home security.

Keeping track of savings 

Popular smart home solutions, such as the Nest Learning Thermostat, can cost hundreds of dollars to install, which begs the question of whether or not they’re worth the investment. While reports on smart home technology costs suggest that smart home products can help residents save up to 10% annually, true savings are still often dictated by use. For example, a smart lighting system that’s left on all night will still run up a bill. Individuals with larger homes also tend to save more, as their utility costs naturally scale higher due to the size of their residence.

Similarly, installing smart household components can require a shift in pricing expectations. If you’re used to paying five dollars for a four-pack of lightbulbs, it’s understandable to feel sticker shock when a single smart bulb costs you $15. However, that same “expensive” bulb may use 80% less energy and last for 20 years, rather than one or two, so it pays for itself many times over.

Managing multiple smart home appliances

Residents looking to create a complete, automated smart home setup will want to start by purchasing a smart home hub. Think of a hub as a central controller that helps individual smart appliances – often from varying manufacturers – talk to each other through a single platform. This allows homeowners to create money saving protocols, such as automatically switching off lights in unoccupied rooms or turning down the air conditioning when the house is empty, without tinkering with specific devices. Steady Wi-Fi or a hardline internet connection is a major requirement for this type of setup. 

However, systems can also operate independently. If you’re not a gadget person but are still interested in the savings and features of smart home technology, it’s perfectly fine to start with a single device and build from there. 

Small changes can deliver big savings 

Though there’s nothing stopping you from owning a coffee maker that schedules each brew through your smartwatch, a dog bowl that allows you to FaceTime with your pup and a doorbell that records 24/7 HD video, you may find that having technology for the sake of technology isn’t all it’s cracked up to be. Small changes can deliver big savings, so don’t be afraid to take a gradual approach to renovation. Here are a few examples of energy saving projects, big and small.

Quick fixes 

  • Smart power strips
  • High-efficiency light bulbs
  • Added insulation 

Weekend projects

  • Motion-sensing faucets 
  • Timed power outlets 
  • Daylight-sensing lighting fixtures 

Complete smart solutions

  • Appliance hubs (e.g., Samsung SmartThings Hub)
  • Thermostats (e.g., Nest Learning Thermostat)
  • Lighting systems (e.g., Belkin WeMo Switch + Motion)
  • Security systems (e.g., August Smart Lock) 

Any investments you make in smart home technology today are likely to pay dividends for years to come as long as you’re intentional about application. So get going – there’s no telling what awesome gadgets you’ll be able to buy for fun in the future with all the savings you create.