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Clark Howard’s Top Strategies for Lowering Winter Heating Costs

Filed Under: Clark Howard, SUCCESS

When winter rolls in, it’s easy to feel helpless about what it’s going to do to your wallet. High utility bills seem inevitable when temperatures plummet, but that is only partially true. You don’t have to just sit there and take it — there are concrete steps you can take to keep more of your hard-earned money in your pocket.

Here is what you need to know about energy costs this winter and how you can take control of your heating bill.

The Home Heating Oil Crunch

If you heat your home with heating oil, this season is shaping up to be really, really ugly.

This hits folks in New England especially hard — even more so than other parts of the Northeast — because winter can be so much longer, harsher, and colder. It creates stark, painful choices: Do you just freeze? Can you afford to fill your tank? Will you be able to pay the rest of your bills?

These are brutal decisions, which is why I want to bring back a strategy I haven’t recommended since home heating oil prices last went crazy: zone heating.

Why You Should Consider Zone Heating with a Modern Space Heater

Zone heating simply means you only heat the space you are actively using, rather than paying a fortune to keep empty rooms toasty. It’s a common practice across much of the world, but here in the United States, we’ve always had a habit of heating entire houses at once.

Here is how you make it work:

Lower the central thermostat: Keep the rest of your home cooler than you normally would.

Warm the room you’re in: Use a small, portable electric space heater to keep the immediate area comfortable.

Now, I know what many of you are thinking: “Clark, aren’t space heaters fire hazards?”

It’s true that older space heaters were notorious for causing horrific, tragic fires. But modern space heaters have come a long way. Today’s models are engineered with safety shut-offs, cool-touch exteriors, and tip-over sensors that make them vastly safer than units from decades ago.

On top of that, they draw relatively small amounts of electricity and are inexpensive to run. If you rely on costly home heating oil, turning down the central furnace and using a safe, modern space heater can be a meaningful alternative that saves you serious cash.

What About Natural Gas?

For the majority of Americans who heat their homes with natural gas, there is some relatively good news this year: prices are not crazy high. Thanks to a substantial amount of new supply coming online, natural gas prices shouldn’t hit you with an ugly surprise on your monthly statement.

While that offers welcome relief, it’s not an excuse to waste money. Taking simple, low-cost precautions will still lower your utility bills and leave more cash in your wallet.

Low-Cost Ways to Winterize Your Home

Regardless of what fuel source you use to heat your home, the fundamentals always matter:

Seal air leaks: Buy inexpensive caulk and weatherstripping at your local home improvement store. Sealing drafts around windows, door frames, and baseboards is one of the cheapest, highest-return DIY projects you can do.

Check your insulation: Proper insulation in your attic and walls keeps expensive heat from escaping into the cold. (Note for New Englanders: If you own an older home, be cautious about how you insulate. Certain types of insulation don’t always play well with older construction and moisture barriers, so do your homework first.)

Control your thermostat: If you work a regular schedule, use a programmable thermostat to automatically drop the temperature while you’re out for the day, then bring it back up to a comfortable level shortly before you arrive home. If you have a busy household with kids and fluctuating schedules, a smart thermostat can learn your family’s daily habits and automatically optimize temperatures to prevent waste.

Final Thoughts

At the end of the day, lowering your winter heating bills comes down to controlling what you can control.

You don’t have to spend a fortune on major renovations to see a difference. By taking an active approach — sealing drafts, managing your thermostat, and considering targeted zone heating — you can make your home far more efficient and keep your winter energy costs manageable.
The post Clark Howard’s Top Strategies for Lowering Winter Heating Costs appeared first on Clark Howard.

Is Your Social Security Taxable? Where Your State and Income Put You

Filed Under: Money.com, SUCCESS

Social Security can be a significant income source for many people in retirement. But it’s important to understand whether — and how much — taxes will chip away at your benefits.
Your location and income play key roles in determining how much you’ll have to pay, if you even get taxed at all. Here’s how to figure out whether your benefits will be taxed and how to determine which rate to expect.

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How federal taxes are determined
The combined-income formula is the federal test that determines if your benefits are eligible for taxation. It requires adding up your modified adjusted gross income, tax-exempt interest and one-half of your Social Security benefits.
For single filers, if your combined income is below $25,000, you don’t pay federal taxes on your benefits. If you are in the $25,000 to $34,000 range, up to 50% of your benefits may be eligible for taxation. Finally, you may be eligible for up to 85% of your benefits being taxed if your combined income exceeds $34,000.
The math works differently for married couples. If their combined income is under $32,000, none of their benefits are taxed. The $32,000 to $44,000 threshold results in up to 50% of your benefit being taxed, and earning more than $44,000 in combined income results in up to 85% of your benefits being eligible for taxation.
How state taxes are determined
Most states do not tax benefits, including Washington, D.C. Only eight states tax benefits, and most of them have income-based exemptions.
Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont are the only states that tax Social Security, but you may be exempt depending on your age and income.
What else to know about the taxes on Social Security
While up to 85% of your benefit may be eligible for taxation if you are in the highest threshold, that doesn’t equate to a 85% tax rate. Any amount of your benefit that is eligible for taxation goes through the same tax rates as ordinary income.
Couples and single filers can file Form W-4V to withhold a portion of every Social Security check for taxes. While it results in less income right now, it also prevents an April surprise in the form of a big tax bill.
People who do not withhold any of their benefits over time risk a large tax bill that they may not be able to pay. Anticipating your tax rate and withholding some of your Social Security makes it easier to plan around taxes when April arrives.
And remember, you don’t have to guess how much you’ll owe in taxes on your Social Security benefits. You can put last year’s numbers into the IRS Publication 915 worksheet to see how much you will owe. It offers a valuable snapshot of what you can expect to pay so that you can be better prepared.

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