The best time to insulate exterior walls is during construction. However, most people don't have this option. Because insulating such large areas is labor-intensive, the builder of your house may have skimped on insulation.
Even if the builder didn't, the 3-1/2-inch cavities between 2x4 framing can hold only so much insulation -- often not enough to achieve the R-value recommended. That's why the outer walls of newer homes often are framed with 2x6s spaced 24 inches apart or with 2x4s spaced on 16-inch centers, with rigid insulation panels on the outside and batts between the studs.
Don't assume that because your home is older and the walls are finished that you can't do anything about these energy wasters. The techniques shown over the next few pages are used commonly to make walls more energy efficient. Be warned, however, that none is easy or inexpensive and that most require the services of a contractor with the specialized equipment and know-how to do the job correctly.
If your walls already have some insulation in them, you may find that it doesn't make economic sense to upgrade their R-value. If you decide to upgrade your insulation, shop carefully for a reputable installer and get several written bids that specify R-values as well as the amounts of material needed. A properly insulated 2x4 wall should have an R-value of 8 with fiberglass or rock wool insulation, R-10 for cellulosic fiber, or R-11.5 for liquid foam. These values may not bring your home up to the recommended levels, but they'll help a lot.
One final note: Unless you choose liquid foam, you'll also need a vapor barrier to protect the new insulation against condensation.