Can a NEST Smart Thermostat Save You Money?
A NEST smart thermostat is one of the best smart thermostats, enabling you to control your heating and cooling system by phone or voice and lower your utility bills. On the downside, you can’t automatically set schedules.


A scorching summer is underway, with 2024 ramping up to be the hottest year on record. As you scramble to find ways to temper rising costs, a NEST smart thermostat and other smart thermostats can be a good way to save you money on your electric bills.
Residential customers' electricity bills are estimated to average $173 per month this summer, up from $168 last year, according to the most-recent estimates from the Energy Information Administration.
Data from the Environmental Protection Agency (EPA) supports the fact that smart thermostats meeting Energy Star criteria save users an average of 8% on their utility bills. That can equal about $50 annually, although savings may be greater in locations with frigid winter temperatures or hot summers. But, research also shows that just slightly more than 30 million homes in the U.S. had smart thermostats in 2020.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Budget-friendly Google NEST thermostats are WiFi-enabled thermostats that require programming when set up for the first time. For many people, that’s just fine, as they would rather adjust temperatures themselves. That’s not to say that you can’t do some basic automating with the NEST thermostat. Just a few taps on your smartphone and you can easily program everything through the Google Home app.
What are smart thermostats?
The technology behind home thermostats has come a long way. From manual controls to programmable options, smart thermostats can save money, add convenience and keep you comfortable. They offer a variety of features not found in manual thermostats, such as Wi-Fi connectivity, data on energy use and maintenance alerts. Some smart thermostats even provide the ability to learn your family’s heating and cooling needs.
How do smart thermostats work?
Smart thermostats are hardwired into your home’s HVAC system, just like traditional thermostats. However, they also need a Wi-Fi connection to function remotely with an app or your phone. Fortunately, if your Wi-Fi goes out, you can still program your thermostat manually.
Through the app, you can typically schedule when your heating or cooling turns on. You can adjust the temperature in your home no matter where you are, so even when away, you can come home to cozy or cool temps. Smart thermostats work with most heating and cooling setups, even those connected to radiators.
Many smart thermostats have a touch or digital screen that allows you to control temperature. You can’t control your home’s humidity, but you can monitor it and set an alarm if it changes. You can also set your smart thermostat to run during specific times of day through geofencing — the ability to create a virtual fence or imaginary boundary on a map — so that when you leave the house, you can adjust the home’s temperature for maximum efficiency and energy usage.
Can a smart thermostat save you money?
It’s no secret that smart thermostats can cost more than manual thermostats. Most are easily installed by homeowners, while some may require professional installation, adding to your costs. However, upgrading to a smart thermostat can optimize your HVAC systems, reducing energy waste and maximizing savings — about 8% on your heating and cooling costs per year.
A study by NEST found that NEST customers saved an average of 10% to 12% on heating costs and 15% on air conditioning costs, or about $131 to $145 a year. Of course, actual savings can vary from one home to the next and are based on your family’s preferences and energy costs in your area.
On the flipside, the retail price of a smart thermostat is between $120 and $250, not including installation, while a mechanical thermostat may only cost between $15 and $50. At $130, the Google NEST Thermostat is one of the most reasonably priced smart thermostats on the market.
What are the upsides of smart thermostats?
While smart thermostats are efficient and offer cost-savings, there are a few downsides to consider also, such as possible security issues and upfront costs. Here are the upsides:
Energy efficient — Smart thermostats offer control over your heating and cooling systems. You can schedule and track energy use and offer the ability to control your home temperature from your smartphone or other smart device to create customized heating and cooling schedules. That way, your system only runs when needed, which equals energy savings.
Convenience — Smart thermostats can be controlled by a smart device, which is probably one of their best features. Many smart thermostats also learn your routines, alert you when the system needs maintenance, and track outdoor weather.
Cost-efficient — Smart thermostats can save customers an average of 8% on HVAC costs, while some manufacturers boast even higher savings. The cost savings will vary depending on location, climate and comfort levels.
What are the downsides of smart thermostats?
On the downside, smart thermostats have higher installation costs and certain security vulnerabilities. Here are the downsides:
Upfront cost — Smart thermostats are generally more expensive to install than manual and mechanical thermostats, and those with specialized capabilities can cost significantly more. If you’re not a DIYer, add installation by a professional to your upfront costs.
Security vulnerabilities — Smart thermostats can present a gateway for hackers and malicious intruders to access your internet network. Regular software updates can limit access, but the threat still exists.
Tech-savvy barriers — Although smart thermostats are generally easy to install, homeowners must be reasonably tech-savvy to get the most out of them. If you’re not particularly tech-savvy and web apps aren’t your strong suit, the headaches these devices can cause may outweigh the benefits. Also, you may have to overcome a learning curve if you don't understand HVAC systems.
Notable features of the NEST thermostat
- Programming via an app. You can program everything on your smartphone in the Google Home app.
- Presence sensing. The NEST Thermostat uses a built-in motion sensor, touch controls, and your smartphone’s location data via a schedule you program to know when you leave your home.
- Voice control. The NEST thermostat also works with Amazon Alexa and the Google Assistant for voice control.
- Ease of operation. The Google Nest Thermostat is also very easy to manually operate and control.
- Low price tag. The NEST thermostat offers convenience without a high price tag.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.
-
April RMD? Five Tax Strategies to Manage Your 2025 Income
Taxable Income The April 1, 2025, deadline for required minimum distributions (RMDs) is fast approaching for retirees who turned 73 in 2024.
By Kelley R. Taylor Last updated
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
What Can a Donor-Advised Fund Do for You? (A Lot)
DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
By Julia Chu Published
-
6 Great Vacation Ideas for Wheelchair Users
These six places provide plenty of travel inspiration for people who use wheelchairs.
By Becca van Sambeck Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published
-
What the Senate's Vote to Repeal CFPB Bank Overdraft Fees Cap Means For You
The Senate voted to overturn the Consumer Financial Protection Bureau's cap on overdraft fees. Here's what you need to know.
By Sean Jackson Published
-
These Eight States Have the Most Expensive Home Insurance in 2025
If you live in one of these eight states, you’re probably paying $1,000 or more above the national average for home insurance.
By Rachael Green Published
-
Charitable Contributions: Five Frequently Asked Questions
Make the most of your good intentions by understanding the ins and outs of charitable giving. A good starting point is knowing what's deductible and what isn't.
By Stephen B. Dunbar III, JD, CLU Published
-
How to Delete Your 23andMe Data
23andMe is pursuing a sale after filing for bankruptcy, leading many customers to look into deleting their data from the company.
By Alexandra Svokos Published
-
Can You Be Fired for Going to Work When You're Contagious?
What's an employer to do when an employee shows up at the office with a cold or the flu and spreads germs to co-workers?
By H. Dennis Beaver, Esq. Published