The government's announcement today on "green loans" to help homeowners make their property more energy efficient focuses on expensive investments in major improvements in Britain's housing. These proposals are an important step forward, but much cheaper measures can be implemented now by householders eager to reduce their energy bills. In many cases, the financial return will be much faster than the big expenditures mentioned in the latest policy document. For every pound invested, the cash savings will also be better than putting up solar panels or even replacing your central heating boiler with an air source heat pump. Simple DIY First things first: a variety of simple and inexpensive measures can substantially cut the need for heating in most homes. It's not glamorous or exciting but the single most cost-effective measure is probably to go round the house searching for leaks and draughts. Filling the gaps in external doors, checking for leaks around window frames and blocking any holes in the brickwork will deliver demonstrable savings for less than £100. (The new Black & Decker thermal leak detector is a wonderful gadget with a light that changes colour when its senses cold spots in a room – available now from US websites). Then think about putting reflective panels behind your radiators. This will send more of the heat back into the room. Radflek has just launched a range of easy-to-fit aluminium membranes that sit invisibly between the wall and radiator. It'll only save about 5% of your heating bill, but the cost for a whole house will usually be less than £40.

Cavity wall insulation Government ministers have been giving speeches for decades about the need to get all external cavity walls insulated. Nevertheless, many millions of homes still don't have this most basic form of insulation. Many people are not even certain about whether their house has a cavity that can be filled but almost all houses built since 1930 can benefit from insulation in the walls. For a few hundred pounds, householders get professionally installed foam or other insulating materials pumped into the gap between the outer and the inner brickwork. Households living on low incomes and pensioners will usually have the work done for free. Savings vary depending on the size of the house but for a detached home, open to the cold air on all four sides, the financial returns will be very attractive. One home I audited saved about 25% of the heating bill and also benefited from a more even temperature around the house.

New fridges New appliances tend to be considerably more energy-efficient than older models. The EU's energy efficiency labels have undoubtedly pushed manufacturers into developing new products that use far less electricity. The biggest improvement has probably come in fridges and fridge-freezers as insulation has improved and motors have got less greedy in their use of power. Any fridge-freezer over about 12 years old may well be worth replacing with a new A++ model - although the financial payback will not be rapid. Look for appliances that provide over 300 litres of cold storage that use less than about 300 kilowatt hours of electricity a year (saving perhaps £35-40 compared to an old fridge-freezer) and which are on sale for about £300. Other domestic appliances will generally offer smaller savings unless the machine is very old and inefficient.

External doors Although much more heat is typically lost through windows, it may be worth looking first at replacing external doors. The lovely stripped pine doors of a Victorian terraced house may be responsible for one-tenth of the total heating bill. Although it might be painful to replace an attractive old front door, the savings will be substantial. For perhaps £500, you can expect to get well-insulated and durable doors that banish draughts and keep the hall warm. Most homes have some double-glazed windows but relatively few are completely refurbished and the cost will usually run to many thousands of pounds. Upgrading to double glazing throughout the house will usually offer a less satisfactory financial return than simply installing robust external doors.

A new boiler or better central heating controls A 20-year-old central heating boiler will waste up to one-third of the gas that it burns. The figure for today's equivalents is less than 10% if the boiler is the appropriate size for the home. Although a new condensing boiler will usually cost at least £1,500, the savings can be several hundred pounds a year in a big house. For those unable to spend this amount of money, a much smaller investment in better heating controls will offer a reasonable payback. Thermostatic valves on all the radiators and a new central heating programmer, such as the Dataterm programmable controller from WarmWorld, will offer the careful householder real savings in return for an investment in the low hundreds of pounds.

• The second and fully revised edition of Chris Goodall's book, How to Live a Low-Carbon Life, will be published next month by Earthscan. [ad#Amazon_How_to_Live_new_edn_pbk]