Photo: Brian Bowen Smith

It wasn't so long ago that setting aside one day each April was all the attention many of us gave to the environment. Now, though, making eco-friendly purchases and lifestyle choices has become such an important part of our routine that every day is Earth Day.

But in these tough economic times, it's vital that your resolve to "do good" doesn't lead you to make bad financial decisions. The reality is that while many green actions, such as installing double-pane windows and buying a hybrid car, are great for the environment and can save you money over time, the up-front costs are higher than the standard alternatives.

I know there is nothing more worthwhile than taking care of the environment so our children and grandchildren will live in a healthier and more stable world; all I ask is that going green not put you in a pile of debt or derail any of your important financial goals: Choose eco-friendly projects that are also economically friendly. Here's how to reduce your carbon footprint without compromising your family's security.

ACT GREEN BEFORE YOU BUY GREEN

There's no rule that says you have to spend money to live in a more environmentally conscious way. Your first project should be to reduce your energy consumption through acts of conservation; it's good for the planet and your finances. Pull out your utility bills from the past year and set a goal to reduce costs by 10 percent compared with the same months a year earlier. If you have kids, how's this for motivation: Offer to give them 50 percent of the savings if your family meets its target. That should get lights turned off when rooms are vacated, marathon showers shortened, and groans eliminated when you suggest adjusting the thermostat up or down a few degrees to reduce cooling and heating costs. Check out conservation tips from the U.S. Department of Energy at EnergySavers.gov and from Worldwatch Institute at WorldWatch.org (type "10 ways" in the search box).

SET YOUR GREEN BUDGET

You can make eco-upgrades with any amount of money—a few hundred dollars for an energy-saving TV and telephone, or upwards of $25,000 to line your roof with solar panels. Based on your financial health, set aside a reasonable sum to cover the projects. If you have your heart set on a major overhaul, promise me that you will first sit down and make sure that your green initiatives dovetail with other important investment goals, like funding a Roth IRA or buying a life insurance policy. This is about striking the right balance in how you allocate money to the different sectors of your life.

Home equity lines of credit (HELOCs) and home equity loans (HELs) have been two popular ways to finance big-ticket home improvement projects in the past. But remember that your house is the collateral for these loans; fall behind in payments and you could put your home ownership in jeopardy. I typically reject using this kind of line for a "want," such as an outdoor fireplace or hot tub. So what's my verdict on tapping home equity for a do-good purchase like $20,000 for draftproof windows? I approve of such financing for an eco-friendly upgrade if-and only if-you follow these rules:

• You have no credit card debt and your retirement savings are on track.
• You have enough saved that if something happened to your job, you could pay off the HELOC or HEL from your emergency fund and still have eight months of savings left over.
• Your project has a high "payback," meaning that you could recoup much of the cost if you were to sell your home. Remodeling magazine has a great online chart that shows cost versus value for various projects (Remodeling.HW.net/2009/CostVsValue/National.aspx).
• Pick projects that future owners will find desirable; check with a local real estate agent to see what buyers in your area value most.
• If using a HELOC, aim to have it paid back within three years. Most are variable rate loans that are tied to a general interest rate; because of our federal debt, I expect interest rates to rise in the coming years, which means HELOC rates will rise as well.

How to make changes for less