Wealth and Energy Savings

Wealthier Americans Spend Less on Energy

A couple of years ago my family renovated our kitchen. Included in our new kitchen was a set of brand new energy efficient appliances all of which came with tags stating energy usage. For example, our dishwasher claimed to use only about $25 worth of electricity per year. If we assume the average dishwasher uses about $50 - $60 per year in energy, this is a savings of over 50%. Let's assume that my dishwasher cost $700 and an average dishwasher costs $400. If I am saving about $30 per year on energy costs, after 10 years of owning the more efficient dishwasher, it will have paid for itself.

This concept was true not only of my dishwasher, but of all of my other appliances. I know that this in fact is a common trend. Spending more up front on energy efficiency will allow long term savings. After say 15 years of having a kitchen full of high-quality appliances, one will actually have paid less than someone who created an average kitchen up front. 

I suppose that I find this a bit disconcerting. In cases like these, being wealthy actually ends up in a way creating more wealth by generating long term savings. Because not everyone can afford the most efficient appliances and homes, most people end up paying more than they need to over the long term and have lower quality standards than wealthier individuals. Not only do those in lower income groups suffer because of costs, the things that are bought in lower price ranges tend to have more problems and require more repairs over their lifetime thus adding another cost to lower income households. 

On the other hand, if you have extra cash to spare, it might be worth it to upgrade some of your things because you can view these purchases as investments. It seems that many people seek to increase their net worth by increasing income, but it is just as acceptable to spend money to decrease expenses. I personally feel that cutting expenses in ways like these energy upgrades may be more helpful in certain situations. If a person was to become unemployed, they would probably maintain their lifestyle for longer if they were used to living with low expenses rather than a high income.