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Insulating your basement walls offers numerous advantages that make the project well worth it. By adding insulation, you can reduce the chances of moisture damage to the house's structure and lower the odds of mold growth. You'll also add comfort to the space by reducing temperature swings and increasing your home's energy efficiency, potentially reducing your energy bills to earn your investment back.

According to a report from Energy.gov, radiant barrier installations can save between 5% and 10% on your energy bill each month that your HVAC cooling is in operation. That fact can mean savings of up to more than $325 per year for homes that experience frequent direct sunlight and high summer temperatures. 

Structural insulated panels and rigid foam boards have the highest R-value of any insulation that contractors commonly use, with R-values reaching up to around 8.0. These types of insulation are best in extremely cold climates, but they’re generally preferred for new construction, as they can be challenging to retrofit. Blown-in and loose fill insulation provide the next best insulative value, provided the installation is done properly. It’s important to choose an insulation type that meets your needs based on climate, as maximizing R-value may not always be financially worthwhile if you live in a moderate climate.

While not every wall requires a vapor barrier, if you do need one and don’t install it, moisture can get between the walls of your home. This can lead to water damage from mold growth or rot, and the excess moisture could also attract pests, including termites, cockroaches, or ants.