With energy costs continuing to rise, homeowners are continuously looking for ways to save money and make their homes more energy efficient. In order to learn where you can save money running your household, you first need to find out where you are losing money.

The average household spends about $2000 a year on electricity alone. Considering that electricity is the most used resource, for heating, lighting and refrigeration, it is only natural for it to be the highest cost. In order to lower your electricity costs, you must think outside of the box and look for the places to improve your home's efficiency.

The first place to start your home inspection is to start at the foundation. Check your insulation and ensure that it is doing the job of keeping the cold out. Be sure to make sure that you have the proper thickness of insulation; otherwise you are essentially throwing your money away. Upgrading your home's insulation is the best way of increasing efficiency.

It is also beneficial to check the age of your appliances and upgrade if necessary. The rule of thumb for appliances is that if they are ten years or older, they should be replaced. Newer appliances are more cost effective and are now regulated. This rule applies to not only stoves, refrigerators and laundry machines, but also to air conditioners and space heaters as well.

When it comes to optimizing your home's efficiency, the obvious choice is to change the type of power you are using. By switching to a sustainable energy source, like wind or solar power, you are eliminating the cost of powering your home. Although the initial cost may seem astronomical, in the long run your investment will bring huge returns, as you will never have to pay for your power again. In addition you are doing your part in preserving our environment. A way to make huge savings on these installation costs is to go the DIY route and to make and install your own solar panels.

The most cost effective way to lower your energy bill is to inspect your home and repair any money draining issues. This is the cheaper do-it-yourself way to improve your home energy costs. However for a long term solution, you may want to consider switching your power source to solar or wind power for a cleaner and less expensive way of powering your home.