Millions of Americans have to come up with creative ways to cut back on expenses as the effects of the coronavirus pandemic continue to weigh down the economy. More than 55 million people have filed jobless claims since March, and with COVID-19 cases spiking in different areas of the country over the last few weeks, many of those jobs may not be coming back any time soon.
As people are finding income help through unemployment benefits, taking up a side-gig, or finding a lower-paying job, they may also be looking for quick ways to cut down on expenses. If you need to trim your budget, here are a few ways you can save money with just a bit of your time:
Simple ways to cut down on expenses
1. Review your current loans and/or consider a personal loan
Many lenders are willing to work with their customers regarding terms and repayment options. If you need to trim your budget, look at any private student loans and mortgages to see if you qualify for a refinance. Refinancing your mortgage loan, private student loan, or car loan could save a chunk of money each month.
If you have a federal student loan, wait until after September before you consider refinancing your loan. If you choose to refinance a federal loan, you’ll have to choose a private loan, and you could lose payment protection options offered by the federal government. Further, collections on all student loans are paused through September 30.
Homeowners may be able to access much lower interest rates than were previously available. Emergency rate cuts by the Federal Reserve encouraged lenders to reduce their interest rates on new mortgage loans and refinancing. The interest rates will vary depending on where you live and your lender’s discretion. If you want to refinance a private student loan, for example, use an online tool like the Credible rates table to compare multiple lenders at once.
Today’s mortgage rates: At publication, according to Freddie Mac, the average 30-year fixed-rate mortgage had an interest rate of 2.88%, and the average 15-year fixed-rate mortgage had an interest rate of 2.44%. Overall, interest rates are down 0.18 to 0.3% over the previous month. Average interest rates have dropped nearly a full percent since March. Interest rates remain low due to the weakened economy.
To see how much you could save on monthly payments by refinancing today, crunch the numbers and compare rates using Credible's free online tool.
Alternatively, you could consider applying for a personal loan to consolidate other debts. Consolidating your debt will allow you to make a single payment each month, and often results in a lower monthly payment than the combined payments you were making before.
2. Reduce your credit card interest rate
If you are struggling to make your monthly payments on your credit card, you have a few options. First, consider transferring any balance you have on a high-interest rate card to one with a 0% APR. Many companies offer promotions lasting anywhere from 3 to 18 months featuring 0% interest on balance transfers. Lenders will review your credit score and credit history. You have the best chance of approval if you have a clean credit record.
Alternatively, consider calling your credit card company and asking them if they’d be willing to lower your interest rate. Credit card companies want to get paid, so they may be willing to work with you if you let them know you’re having a hard time making payments.
When you’re searching for the best credit card rates, consider using the Credible tool to compare interest rates and benefits from different credit card companies in one place.
3. Review auto insurance and life insurance options
You can save a significant amount of money on your auto insurance if you’re willing to field a few calls. Numerous online tools allow you to get quotes from multiple companies. Each request should only take a few minutes, but you can get an estimate for the coverage options they offer and pick a company that provides the best deal. If you’re willing to work with companies that do less marketing (so they’re less well-known), you could save even more.
If you need to save money on your life insurance, consider switching to a term policy instead of a whole life or universal policy. They’re almost always far less expensive.
4. Cut unnecessary expenses
When money gets tight, there are always a few sure-fire ways to take back control over some of your money. Here are a few simple ways to tighten the purse strings and start saving money quickly:
- Eliminate cable, Netflix, Hulu, or other streaming services
- Prepare your meals and coffee at home, and cut back on ordering out
- Skip your convenience store runs by planning ahead
- Trim down your cell phone plan to a more affordable package
- Cut back or eliminate alcohol and soda from the grocery budget
- Shop at a consignment shop for clothes, shoes, or home décor
- Set your bills to auto-pay to avoid late fees
- Create a menu and only shop for what you need