3 easy ways to cut spending as moratorium on evictions and unemployment benefits expires
The coronavirus pandemic has dealt an unforeseen blow to many industries, leaving Americans without jobs and wages. The federal government has launched a number of financial assistance programs, such as increasing unemployment benefits and stimulus checks, as well as suspending evictions during the pandemic. But as the economy returns to its pre-pandemic state, those protections are about to expire.
The CDC issued a final overtime the moratorium on evictions, giving tenants until July 31, 2021 to get their finances back on track. And about half of the states cut the extra $ 300 unemployment benefit before the Sept. 6 expiration date, hoping to motivate people to re-enter the workforce.
Yet many consumers are still behind on rent and struggle to make ends meet as we recover from the impact of COVID-19. If you want to get your household expenses back on track, you are probably looking for ways to cut your expenses.
There are many ways to cut expenses without having to sacrifice necessities like utility bills or food costs. You may be able to save hundreds of dollars each month by:
- Pay off your credit card debt
- Refinance your private student loans
- Find cheaper insurance
You can search for a range of financial products such as loans and insurance in Credible’s online marketplace. It can help you significantly reduce your monthly expenses so that you can become financially stable again.
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1. Pay off your credit card debt at a lower interest rate
Credit cards carry noticeably high interest rates, but millions of Americans still have month-to-month credit card debt. Average U.S. household owes $ 6,270 in credit card debt, Federal Reserve’s latest report says Survey of Consumer Finances. This translates into hundreds of dollars in credit card payments that destroy monthly budgets.
When you make the minimum monthly payments on your credit card, it can feel like you’re throwing money on debt without seeing it go down. But it is possible to establish a tangible debt repayment plan, and even lower your monthly payments, by refinancing your credit card debt with a personal loan.
The average interest rate for personal loans is 9.46%, compared to 15.91% for interest-bearing credit accounts, according to the Fed. Because they offer lower interest rates and longer repayment terms, personal loans can help you lower your credit card payments and make room in your budget for other expenses. Let’s take an example, assuming the average Fed interest rates:
- If you make the minimum payment of about $ 250 on a credit card debt worth $ 6,270, it will take you over 11 years to pay off that debt.
- If you refinance a 10-year personal loan, you can reduce your payment to $ 81 and reduce your debt repayment schedule by one year.
This can free up $ 169 in your budget, which you may be able to spend on past due rent or other expenses. Use a personal loan calculator to see your new payment.
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2. Refinance your private student loans to reduce your monthly payments
Student loan rates hit record highs in June 2021, which means there’s never been a better time to look for a lower rate on your private loans.
A lower interest rate can help you lower your monthly loan payments, save money on interest over time, or pay off debt faster.
This is especially true for borrowers who took out student loans several years ago when the rates were much higher. Average interest rates were 7.64% in 2018, according to Credible data. By refinancing your student loans at a better interest rate, you could save hundreds of dollars each month, giving you more leeway in your budget.
Keep in mind that it is not recommended that you refinance your federal student loans right now, as you will lose protections like the student loan forbearance moratorium.
Credible’s Student Loan Refinance Calculator shows you how much you can save on your monthly payment.
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3. Look for insurance with a lower monthly premium
One last way to make room in your monthly budget is to look for cheaper insurance. You can save up to 30% on your insurance premium if you combine your home and auto plans, for example. Also consider changing your level of coverage to lower your monthly insurance premium, keeping in mind that less coverage means you could face higher expenses in an emergency.
Shop around for auto, home and life insurance plans on Credible. This allows you to compare premiums without affecting your credit, so that you can see if you are able to save money on that monthly expense.
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