Abstract. In this study, a sample building was simulated in order to simultaneously examine energy savings and the economic aspects resulting from thermal insulation. By modeling the sample space under the climatic conditions of Herat, characterized by cold winters and hot summers, the annual heating and cooling energy consumption of the building was calculated using common insulation materials widely used in Afghanistan for external walls. In addition, the amount of heating and cooling energy saved through insulation was determined. The cost of insulating the walls, including the cost of the insulation material, labor, transportation, and other related expenses, was also estimated. Finally, by calculating the break-even point, the payback period for the insulation investment based on the achieved energy savings was obtained. The results indicate that the initial cost of insulating the building walls is recovered after approximately six years. Furthermore, the most economical wall for insulation was found to be the southern wall with the recommended Preen concrete block insulation, which had a payback period of about 41 months. This payback duration is reasonable and fully justifies the application of wall insulation from an economic standpoint.