Congratulations on buying your first home! That's a big step and for most people, the biggest investment they will make. I'm happy to hear you like the layout of your new home, because that's a difficult one to fix without moving walls.
As with many older homes, updating is a way to modernize and upgrade the space but more importantly, to make it your own. To help you prioritize the home improvement projects you mentioned, there is one important question that you would need to answer. Is your kitchen and bathroom currently functional? I'm assuming that you are living in the home while you renovate. If you can't use the kitchen, or the bathtub/shower is leaking, you would definitely want to put those projects first.
If your kitchen and bath are functional and simply need modernizing, I definitely recommend replacing the windows first. While kitchen and bath remodeling most certainly adds value to your home, you don't see a return on that investment until you are ready to sell. Replacing old windows with new triple pane, energy-efficient windows gives you a financial return on your investment immediately, saving you a lot of money on your monthly energy bills.
By the description you gave of your current windows, you mentioned condensation fogging up the glass between the panes. Fogging between the panes is a classic symptom of a window with a broken seal. Windows are actually not just a couple panes of framed glass. In between the panes is a transparent gas called Argon. This is what provides the insulative properties of the window. A triple pane window with Argon gas has an R-24 insulative value and prevents the thermal transfer of hot/cold air from both getting into your home, and from escaping it. Just as an example of how much insulation that is, the exterior walls of most homes are not rated R-24.
If the window's seal is broken, the Argon gas has escaped. This creates a vacuum, allowing the surrounding air to enter. Air contains moisture, and that is why you have fogging or condensation on the interior of the window. In that situation, all you have between you and Mother Nature is a few panes of glass. Unfortunately, glass is a very poor thermal insulator. (For more information on when it's time to replace old windows, CLICK HERE.)
So why is any of this important? The first reason is that you are paying a great deal more money to your energy company than you should be, since all your heated or cooled air is passing virtually unhindered through the glass. I can tell you from personal experience that l2 years ago I replaced about seven leaky windows in my home. It saved me $80 a month on my Consumers Energy bill. The best part of this story is I had only financed that project for $72 a month. Not only was I saving $8 a month, I improved the value and comfort level of my home. There are not too many home improvement projects you can do that give you that kind of return on your investment.
The second reason, which most people tend to overlook, is that leaking windows have a negative impact on your furnace and air conditioner, making them work much harder than they would ordinarily need to for maintaining a constant temperature. You may have noticed that your furnace runs a lot, or in the summer your air conditioner seems to never shut off. These are expensive systems. Overworking them can cause premature failure, usually at the very worst times when you are not financially prepared to handle that kind of expense. Replacing leaky windows will help protect your furnace and air conditioner as well let you keep more of your money in your pocket.
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