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5 Ways We Save on Propane

Guest post from Ruth:

I live in Michigan and heating is our biggest utility expense… particularly because we live in the country and use propane. Our stove, furnace, and hot water heater all run off of propane, and as you can imagine, refilling our 500 gallon tank is pricey!

Our propane bill has been very stressful for us over the years –our propane provider has a minimum fill requirement of 250 gallons, the prices weren’t always good, so we tried to wait as long as we possibly could to fill our tank, and we still ended up spending serious money for each fill.

Now, thanks to some modifications, we not only save money on propane, but we don’t stress over paying the large bill.

Here’s some of the modifications that we made:

1. We now have a written budget every month.

We have two savings accounts, one is designated as our Emergency Fund and one is our Irregular Expense Fund. Each month, a designated contribution is put into our Irregular Expense Fund. By looking at propane usage from prior years, we are able to make an educated guess on an appropriate monthly amount to save.

Now when we need to fill up the propane tank, we just do it and don’t need to worry about how to pay for it. We transfer the money from our Irregular Savings Fund to our checking account and use our debit card for the fill.

2. We switched propane companies.

Not all propane companies are equal… and after one particularly cold winter, we chose a new company that better met our needs.

Our new company offers a price protection plan called a “Price Cap” program. We pay $50 to be enrolled for this program, and we then have a written guarantee that our price will not exceed a certain point. If the actual price per gallon is below our capped price, we pay the actual price.

Our capped price is a little over $1.50 per gallon this season, but I just filled up and paid only $1.40 per gallon.

Their price protection secret was that they bought large amounts of propane inexpensively during the off season and stored it for later use in off site storage.

We’ve found that picking a company with simple common sense ways of controlling the price saves our money and lowers our stress level greatly.

3. We watch prices.

We try to fill up when the prices are good, rather than when we need propane. Pricing is best in the summer, and this past summer, prices got down around $1 per gallon. We went ahead and filled up then, which lasted for several months.

4. We seal up air leaks, when we can.

We noticed cold air was leaking through the front door, so we purchased cheap weather stripping and were able to drastically decrease the cold air coming in. It might not sound like much, but it can add up to big savings.

5. We use a programmable thermostat.

The temperature automatically lowers when we leave the house and while we’re sleeping — saving a significant amount of propane (and money!)

Heating is a large expense for those of us who live in the Northern part of the country. But thankfully, there are ways to make it more manageable.

Ruth is a homeschooling mom of 3 kids, ages 10, 7, and 4.

photo source

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19 Comments

  • Karen says:

    I love the idea of an irregular expense account. You’re very savvy to go ahead and fill up in the summer when prices are low. Thank you for a new perspective on funding heating bills.

  • Amy says:

    Living in the warm south, I’ve never thought about this before! I like your plan and perspective.

  • Kimberly says:

    This is very helpful–thank you so much! We’re praying we move to the country soon, and I’m keeping your tips for reference. 🙂

  • Cindy says:

    We are also Michiganders and have struggled with propane expenses over the years. Currently, we use a pellet furnace as our primary source of heat and use the propane furnace as a back-up. Hauling bags of pellets down to our basement is a lot of work for my husband but we sure do enjoy the warm heat it provides!

  • Such smart tips! I feel like when it comes to propane or gas bills, we feel kind of like it is a stuck charge. I love how Ruth got creative to find ways to save on a necessity.

    • Amelia Barrales says:

      I live in a small community and am on disability. My house is propane heated and the hot water also I have a 200 gallon tank and it’s gone in a month and a half . I’m going to try to see if I can get someone to put a better thermostat in here . I don’t like my house particularly warm and I turn the heat off at night but it still runs out quickly. I don’t know what to do! It’s just me, so I have no help , will try these tips to see if they help ! Thank you

  • Amy says:

    We live in the country in northern Michigan and another way we save on propane is using a heat pump. Our air conditioner and furnace work together to run a/c one direction in the summer and then it works in reverse in the winter (I’m not really sure on the mechanics). It heats using electricity at a fraction of the cost until the temp drops below 20-25 degrees. We saved enough in the first two years to pay for our unit. If money is really tight it may not be an option but just thought I’d throw out another way to save. We have a 330 gal tank and haven’t filled up since last May.

    • Ruth says:

      Thanks for your comment! Does it work without having central air conditioning? We don’t have air conditioning in our home.

      • Amy says:

        The heat pump is an ac/ heat pump combined unit outside and a special coil in your furnace. So, yes, you’d need a special ac unit and compatible furnace with coil to do this. That’s the upfront cost. We built our house and didn’t have all the money right away so we picked a compatible furnace and had the coil installed. Then a year later we added the outside ac/heat pump unit.

    • Kyle says:

      Great info Amy!

      Which system did you go with? Did you see a big increase in your electric bill? What is the sq ft you are heating? I’m looking to purchase a heat pump and researching every angle before we pull the trigger

      • Amy says:

        Our house is a single story with finished basement. It’s about 1800 sq ft upstairs and maybe 1300 downstairs. We have the heat pump on a separate meter because our electric coop gives a heat credit if it’s hooked up that way. So after credit it’s about 20-30$ a month. when the heat pump or ac is running. I don’t know what system we bought. It was whatever the local heating company recommended that would meet our needs. I don’t think it was the most efficient/expensive, but also not the cheapest. I hope this helps.

      • Kyle says:

        Very helpful thank you. Do you have DTE for your electric company? I have been told there is a different rate for winter/heat pumps but I can’t seem to find it. We have the separate meter as well. We have a similar size house with unfinished basement. Looks like it might be a good option if I can find the heat rebate from DTE.
        Thanks again

  • Rachel says:

    We used to spend around $1600 per year on propane, but found out we can prepay during the summer for the fuel that will be delivered during the winter. Paying the summer price of 99¢ per gallon saves us about half of what we used to pay.
    Last year, we paid about $800 total for the year. I feel so much less stress when I see the propane truck pull up to fill our tank especially knowing it’s already paid for!

  • Lori says:

    Don’t forget to insulate your electrical outlets with the inexpensive kits you can pick up at big box stores or home stores. Make sure to cap your outlets with outlet covers on the exterior walls. We are in Missouri, but when that cold air blows, it can make a big difference in how often our furnace runs. Little things can make a BIG difference in heating bills.

  • I appreciate the information regarding propane tanks and how to help them last long. It is really smart to seal off the air as tightly as possible to make sure that you keep as much air as possible. I never knew that you could actually use a thermostat to check what temperature it is. Thanks again!

  • Theresa D says:

    We recently moved to a rural area right outside of Lansing, and I was so nervous to get propane, partly because my grandmother worked for AmeriGas her entire life and warned me NEVER to buy a house with propane. But I was surprised at our cost, we spent a total of $820 between our first fill up of last year in November until now (2200 sq ft house and 500 gallon tank)… Way cheaper if we compared it to our Consumer’s Bill in the city, but then again most everything in our new house runs on electricity and it was built in 2001 and is well insulated, so that probably has a big effect on why our bill isn’t so expensive. I really like our propane company, they come by on a regular basis and keep an eye on it and don’t let it get past 50% that way our bill is never too expensive. Our friends who live a few miles from us have poor insulation and filled up their tank 3 times for $1000 in one year!

  • Ruth says:

    I’m the author of this article.

    Ironically, in November of 2017, my husband was laid off and a few weeks later, he got a job offer at a company in East Tennessee. So we packed up and left cold Michigan and no longer have propane.

    I guess that I need to now look for tips to avoid breaking the bank on air conditioning. LOL!!

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