While we are all home it is time to cut expenses. Here are some tips:
1) Refinance and reduce your mortgage payment.
One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance.
Reducing your interest rate not only helps you save money, but it also increases the rate at which you build equity in your home, and it can decrease the size of your monthly payment. For example, a 30-year fixed-rate mortgage with an interest rate of 5.5% on a $100,000 home has a principal and interest payment of $568. That same loan at 4.1% reduces your payment to $483.
2) Reduce credit card interest, call and request a rate deduction.
There’s probably a customer service number on the back of your credit card. Most people ignore this unless they find themselves in a really sticky situation, but customer service is there for a reason.
Arm yourself with competitors’ information, know what you’re asking for, and simply make the call. It can’t hurt to ask, right? It seems too simple, and that’s why so few people actually take the initiative to do it.
3) You are likely overpaying for home insurance. Shop around and compare.
You may have been with the same company for years and feel hesitant switching your homeowners insurance carriers. Often it’s because you’ve had the home insurance policy as long as you’ve had the mortgage on your home. In fact, your insurance may feel tangled up with your mortgage payments. Maybe your lender set up an account on your behalf so you didn’t really get a chance to compare rates.
Regardless of how you ended up with your current policy, it’s advisable to shop around to see if you can get a better rate without compromising on quality.
4) Cancel all subscriptions to apps, magazines, and other services you don’t use.
Combing through financial statements and receipts helps you to identify subscriptions and memberships for which you did not go through an app.
You want to go through at least one year’s worth of statements and receipts to make sure you identify subscriptions and memberships for which you are being charged every year, monthly and/or weekly.
5) Shop for coupons and discounts.
6) Consolidate your loans to a low-cost credit card.
Loan consolidation can help simplify or reduce your monthly payments, which can help you save money each month.
There are multiple ways to consolidate debt, and determining the method that’s most beneficial for you depends on how much you want to pay off, what your current financial situation looks like and how strong your credit history is.
7) Shop online. Most retailers are offering great discounts right now.
Retailers are offering discounts online right now because few people are outside shopping. Many stores are closing their doors to prevent the spread of the novel coronavirus.
But that doesn’t mean that you have to stop shopping altogether. Most of our favorite retailers are still up and running online — many are even offering discounts, likely to make up for lost in-store and to provide some retail therapy for people stuck at home.
8) Eliminate monthly cable bills. Use Netflix, Hulu, or other TV streaming options.
The reality is that cable is probably one of your largest utility bills and most likely, the least necessary one. Cutting cable could end up saving you thousands of dollars a year – money that could be better spent elsewhere. It may be a difficult decision to make, but once you get through it and discover other options, you’ll be glad you did.
9) Cancel your gym membership…Get outside and take in some fresh air.
Instead of paying for a gym membership, run and exercise outside. Jog daily and you will feel great, relieved and accomplished after you’re done with each run.
If you hate running, then do push-ups, jumping jacks, burpees and crunches etc. outside. In the summertime, jog or workout outside in the mornings when its cooler. In the winter, bundle up before your workout.
10) Re-evaluate your cell phone plan and request a reduced rate.
Study your date usage. Once you have established the habit of using Wi-Fi whenever possible, take a look at actual cellphone data usage in the settings screen of your phone and also in your monthly cellphone bill. Once you have a good understanding of your data usage habits, make sure that your cellphone plan best corresponds to your data needs.
For example, if you love watching Netflix and YouTube and are constantly paying data overages, consider switching to an unlimited data plan to save on overage charges. Conversely, if you use minimal data, consider switching to the lowest tier data plan to save on your monthly bill.
Follow these steps so that you will have peace of mind during the coronavirus crisis. And, along the way, share the process with others so they can experience financial peace during this crisis as well.