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Calculating Your Smart Home Investment

Financial Planning Calculating Your Smart Home Investment

With all of today’s home-based tech gadgets and virtual personal assistants, smart homes are quickly becoming ubiquitous. And with high demand for connected products, so too comes ease of use, accessibility and affordability.  

But as with all expenses, it’s important to budget for smart tech upgrades to your abode. Luckily, it’s easier (and more affordable) than it’s ever been. Here, we explore some of the more common smart home tech investments, along with a few things to consider when deciding whether they’re worth the cash. 

Virtual Voice Assistants

These devices use natural language processing (NLP) to match a user’s voice commands and execute an action, like “Turn off the lights.” Many of these voice assistants use a “wake word,” like the name of the device (“Hey Google,” for example) in order to alert the assistant so that it’s ready to listen to you.  

From online shopping to reading your email for you, virtual voice assistants have the potential to do a myriad of helpful things around your home.  

Major Brands: The top players in the virtual voice assistant arena are Amazon’s Alexa, Apple’s Homepod, Microsoft’s Cortana and Google’s Home — but the list is growing. It’s been reported that Facebook may be working with Amazon’s Alexa and Apple’s Siri to create its own smart speaker in this burgeoning market. 

Average Price Range: The most basic versions, like Amazon’s Echo Dot, can start at as little as about $50, while more mid-range devices go for about $130 (Google’s Home) and high-range assistants like Apple’s Homepod go for $349. 

Life Expectancy: While it’s hard to predict how long these up-and-coming tech devices will last, it’s safe to say that there will be plenty of similar products for a long time to come. Not only that, but virtual assistants will likely continue to improve significantly when it comes to their capabilities, connectivity and affordability. To put things into perspective, it took 13 years for the television to reach 50 million Americans but only two for smart speakers to do the same thing.

Is it Worth It? It depends on how (and how much) you’ll be using the device. If you call on your virtual voice assistant at every whim, the upfront cost may be well worth the convenience. On the other hand, a 2017 Ovum survey of both U.S. and U.K. residents said that about 50 percent of users don’t find virtual assistants useful. Though it’s difficult to narrow down the reasons why, it’s a clear message to manufacturers that they need to up their game to stay competitive. 

Smart Thermostats

Intelligent heating and cooling systems have taken the tech world by storm, particularly due to their affordability and savings potential. These smart thermostats learn users’ habits — when they leave for and come home — to optimize in-home temperatures in a way that traditional thermostats can’t. After all, if you’re going away on vacation, there’s no need to leave your AC on the whole time, but you might want to turn it up an hour or two before you return. Cue smart thermostats.

Major Brands: There’s a lot to choose from when it comes to intelligent thermostat needs. Popular brands include Ecobee4, Nest Learning Thermostat, Lux/Geo Wi-Fi Thermostat, Lux Kono Smart Thermostat, Bosch Connected Control BCC100 Thermostat and Honeywell Lyric T5 Wi-Fi Thermostat. 

Average Price Range: While you can find some smart thermostats for under $100, most range from about $170 to $260, depending on their uses and features. Some cost as much as $500. 

Life Expectancy: Intelligent thermostats have the potential to last just as long as traditional thermostats, as long as you maintain them correctly and don’t misuse them. However, it’s important to note that some smart thermostats are hardwired into your home while others aren’t. If yours operate on battery power, it could last a full two years before needing new batteries — but always pay attention when your thermostat alerts that its batteries are low. 

Is it Worth It? Not only are smart thermostats extremely convenient, they also have massive potential for saving you some cash on utilities. While the upfront cost may be a bit hefty, smart thermostats often pay for themselves in the long run. The Energy Star program states that homes equipped with smart thermostats can save up to $180 per year on heating and cooling. What’s more, intelligent thermostats can provide you with reports that show you how to optimize your heating and cooling settings to save even more money. 

Smart Lighting

Yep, even light bulbs are getting smarter these days — and not just in the “clap on, clap off!” way, either. With smart LEDs, you can connect all the light fixtures in your home to your virtual voice assistant or smartphone to control individual lights in every room. Not only is this super handy, but it can also provide an extra layer of security if, say, you’re out of town and want to randomly turn lights on and off so it appears that someone’s home. Plus, color-changing bulbs make for great mood lighting and can even sync up to music and movies for extra effect. 

Major Brands: Though brand doesn’t matter as much when it comes to intelligent light bulbs, popular bulbs include the Philips Hue White, Philips Hue White and Color Ambience A19 Star, C by GE Starter Pack, Cree Connected Light Bulb, Eufy Lumos Smart Bulb White, LIFX Color 1000, Ikea Tradfri Gateway Kit and MiPow Playbulb Rainbow. 

Average Price Range: While you can find affordable options under $20, some intelligent light bulb kits cost upward of $200, depending on the number of bulbs and features included. 

Life Expectancy: Regardless of price, the vast majority of smart LEDs have a lifespan greater than 20 years. That’s anywhere from 20,000 to 50,000 hours — or up to five times longer than any other light bulb in stores today. Compare that to the measly 1,200 hours of an average incandescent light bulb, or a CFL’s 8,000 hours. 

Is it Worth It? Even if you do decide to outfit your home with a $200 smart light bulb kit, it’s arguably still worth it. They last practically forever, they can help keep your home safer, you can control them from your smart device from anywhere you have internet access, and they’re better for the environment than traditional bulbs.  

Even though the upfront cost of smart LEDs can be a little off-putting, you might consider this an investment purchase. Yes, they’re more expensive at first, but take a look at this calculation from Simple Family Finance, which added up the total costs of all three types of bulbs, plus 25,000 hours of electricity usage — this is how the expenses broke down:  

  • Incandescent: $218.50 
  • CFLs: $64.63 
  • LEDs: $53.75 

That’s a lot less money over the long term, which means a lot more money in your wallet for making other awesome smart upgrades to your home. Smart garage door, anyone? (Yep, they have those, too.)


Mark Simmonds brings 20 years of insurance industry experience to his role as managing director and chief product officer at Esurance. His diverse expertise in many areas of the business, including product, underwriting, finance, operations, and more, help shape his writing. Visit Esurance’s website to find out more about how certain smart home products can reduce your homeowners insurance. 


The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or view of Intuit Inc, Mint or any affiliated organization. 



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