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Monday Money Report

| July 24, 2023

The markets were up again last week, with the Dow Jones Industrial Average having its longest winning streak since 2017.[1] The great thing about these gains is that they are showing across multiple sectors, and not just technology stocks. Nine of eleven sectors in the S&P 500 rose as well, with 33 stocks setting new highs.

Stocks aren’t the only thing rising, as we see temperatures across the country setting new records. As our air conditioners hum along keeping our homes cool, we see the results in higher electric bills.  The Department of Energy recommends keeping your thermostat at 78 degrees during the day, although at least one Senator has noted the agency doesn’t follow that recommendation for its own offices.

What other options do you have to reduce energy costs?  An easy first step is a programmable thermostat, to keep the house warmer when you’re not home.  Beyond that, an energy audit can identify more areas to make your home energy efficient. These include insulating the pipe from your hot water heater, switching to LED bulbs, and unplugging appliances when not in use. The audit itself has a tax credit for 30% of the cost, up to $45.  

There is also a 30% tax credit with different limits for energy efficient windows, insulation, exterior doors, new HVAC systems, hot water heaters, and more. You can receive a credit for solar panels or geothermal systems. While you’re still paying for all of these improvements, the tax credit is a dollar-for-dollar reduction in your federal income tax.  Beyond that, the energy savings over time will continue to add up.  The EPA estimates that new attic insulation can save about 11% on your energy bill.[2]

If you opt for the recommended balmy 78 degrees inside your house, use ceiling fans to push air down, keeping room temperatures constant and reducing the need for air conditioning.  Be sure they run counterclockwise in the summer and reverse them to run clockwise in the winter.

Reducing your electric bills can be an initial investment in time and money, but the pay off is long term. Websites for Energy Star and BGE can provide inspiration for projects of all sizes, enabling you to tackle this project one step at a time.

Keep your receipts for everything to give to your CPA at tax time, and scan receipts for big projects to save until you sell your home, as capital improvements may reduce your taxable gain when you sell.

Your action item this week is to check your credit report.  You’re entitled to a free credit report every year from each of the three credit bureaus.  You can access this at  Pull one report every four months, and check for unfamiliar accounts and other potential fraud or errors.

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CovingtonAlsina is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

[1] Reuters, Dow climbs on path to tenth straight day of gains, by Noel Randewich and Bansari Mayur Kamdar, 07/21/2023