Extent of an Energy Budget

• Energy costs can make up a significant portion of overall living expenses, especially if you own a large home. "Energy" here includes not just electricity, but any fuels you use, such as natural gas, heating oil, propane and firewood. It also includes electricity supplied portably through batteries. You may choose to also include the costs of fueling your vehicle, or you may deal with those in a separate budget dedicated to transportation costs.
  
  Every major appliance you use, every electrical outlet with a device plugged in, every battery you buy, every gallon of water you heat and every instance of air conditioning you use entails an energy cost. When writing your energy budget, you need to take all of these things into account.
  
  

Tracking Costs

• Go through your home and add up the power ratings on your various bulbs, appliances and devices, and use this to build a master list of where your electricity is being spent and how. You may also want to invest in a smart meter system to measure how much electricity your home uses at any given time. Using these tools, you can target specific areas in your home and specific times of day for savings.
  
  For non-electric energy costs, build a similar list by going through your home and identifying costs item by item.
  
  Tracking your costs can require quite a bit of up-front investigating, but you only have to do it once, then keep your lists current as you change or add energy costs in your home. In return for your investment of time, you will have valuable information you can use to save yourself thousands of dollars in the years ahead.
  
  

Conservation Savings

• The U.S. Department of Labor estimates that the average family spends between 7 and 10 percent of its total income, or about $3,400 to $4,500, on energy costs, and another 5 percent, or $2,400, on gasoline costs. You can save hundreds of dollars annually by conserving energy across the board. With the help of your itemized list of all your energy costs, you can target specific expenses for cost savings.
  
  Some of these savings entail no reduction of time or convenience at all, such as turning off appliances you're not using. Others do require sacrifice, such as running the water heater at a lower temperature or drying your clothes on a line during the summer, and require a judgment call by you as to how far you are willing to go to save money.
  
  

Infrastructure Savings

• You can save money by upgrading your energy infrastructure to be more inherently efficient. This can be as simple as changing out some of your incandescent bulbs with fluorescent ones, or as ambitious as replacing major appliances with new, energy-efficient ones, weatherizing your house, installing solar panels and cutting out some energy-hogging activities altogether.