3 easy ways to cut expenses as eviction moratorium, unemployment benefits expire

With federal COVID-19 protection coming to an end, you may be looking for an easy way to cut your monthly expenses. Refinancing your loans can save you money every month without changing your spending habits. (iStock)

The coronavirus pandemic dealt an unforeseen blow to many industries, leaving Americans unemployed and unpaid. The federal government has launched a number of financial aid programs, such as an increase in unemployment benefits and economic controls, as well as the suspension of evictions during the pandemic. But when the economy returns to its pre-pandemic state, those protections will expire.

The CDC has finally extended the eviction moratorium, which the tenants have until July 31, 2021, in order to get their finances back in order. And about half of the states canceled the $ 300 additional unemployment benefit before the September 6 expiration date in hopes of motivating people back into work.

Still, many consumers are still behind on rent and struggling to make ends meet as we recover from the effects of COVID-19. If you want to regain control of your household expenses, you are likely looking for ways to cut your expenses.

There are several ways to cut expenses without sacrificing necessities like utility bills or grocery bills. You can save hundreds of dollars every month by:

1. Paying off your credit card debt
2. Refinancing your private student loan
3. Shop for cheaper insurance

You can search for a range of financial products such as loans and insurance on Credible’s online marketplace. In this way, you can drastically 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 notoriously high interest rates, but millions of Americans still carry credit card debt month to month. The average American household owes $ 6,270 worth of credit card debt, according to the latest US Federal Reserve survey of consumer finances. This means that hundreds of dollars worth of credit card payments are tearing into monthly budgets.

When you make the minimum monthly payments on your credit card, it can feel like you’re throwing money on the debt without it going down. However, it is possible to create a specific debt settlement plan and even lower your monthly payments by refinancing your credit card debt with a personal loan.

The average interest rate on personal loans is 9.46%, according to the Fed, compared to 15.91% for interest-bearing credit accounts. Because they offer lower interest rates and longer repayment periods, personal loans can help you lower your credit card payments and free up budget for other expenses. Let’s take an example, assuming the Fed’s average interest rates:

• If you made the minimum payment of about $ 250 on credit card debt worth $ 6,270, it will take you over 11 years to pay off that debt.
• When you refinance to a 10 year personal loan, you can cut your payment to $ 81 and cut your debt settlement plan by a year.

This can free up $ 169 in your budget that you can potentially use for back rent or other expenses. Use a personal loan calculator to see your new payment.

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2. Refinance your personal student loans to lower your monthly payments

Student loan interest rates hit a record low in June 2021, meaning there has never been a better time to look for a lower rate on your personal loans.

A lower interest rate can potentially help you lower your monthly loan payments, save money on interest over time, or pay off debts faster.

This is especially true for borrowers who took out a student loan a few years ago, when interest rates were much higher. According to data from Credible, the average interest rate in 2018 was 7.64%. By refinancing your student loans at a better interest rate, you could save hundreds every month, which gives you more headroom in your budget.

Remember, it is not advisable to refinance your federal student loans now as you would lose protections like the student loan deferral moratorium.

Credible’s refinancing 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 final 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, for example, you bundle your house and car tariffs. Also, consider changing your insurance coverage to lower your monthly insurance premium. Remember, less coverage means that in an emergency, you could be stuck with higher expenses.

Find Auto Insurance, Home Insurance, and Life Insurance on Credible. This allows you to compare premiums without compromising your creditworthiness, so you can see if you can save money on those monthly expenses.

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Do you have a finance-related question but don’t know who to contact? Send an email to the credible money expert at moneyexpert@credible.com and your question could be answered by Credible in our Money Expert section.

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