Reduce regular payments
The CARES act also states that all federal student loans will be suspended and interest on these loans won’t accrue through Sept. 30, 2020. If you have student loans, you might be able to reduce your payments each month and save a good amount of money per year. First, look into your repayment plan options. An extended repayment or income-based repayment plan may help lower your monthly payment (however, if you’re increasing the repayment terms, you’ll pay more interest over time).
Also, consider consolidating your loans. Consolidation means that you’re combining all of your current student loans into one big loan with one payment. This can potentially lower payments because you might get a better interest rate (especially if your credit score has improved since you first took out the loan!). Then, you can put that money saved into your emergency savings and feel better about the future.
Rents and mortgages
With COVID-19 affecting the global economy, landlords and mortgage providers might be more willing to work with people who are recently unemployed or have reduced incomes. If you have a federally backed mortgage, the CARES act includes a foreclosure moratorium and a right to forbearance for people who are experiencing financial difficulties because of COVID-19. Check out the Consumer Financial Protection Bureau’s (CFPB) website to learn more about what steps you need to take for mortgage relief.
If you don’t have a federally backed mortgage, you should still contact your mortgage provider to see how they can work with you. The CFPB has encouraged financial institutions to work with borrowers who are struggling to meet their financial obligations because of COVID-19.
If you’re a renter, talk with your landlord about potentially splitting rent into multiple payments if you can’t afford the whole thing at the beginning of the month or ask about reduced payments for the time being.
You should be evaluating your homeowners and car insurance regularly to make sure you’re not overpaying. We recommend evaluating your homeowners insurance every year and your car insurance every six months. You could potentially save hundreds of dollars a year by lowering your premiums.
We also recommend calling your current insurance before committing to another provider to see if they can offer you a better price (especially if you’re commuting less). They may be able to match or beat what another company is offering. When you’re on the phone with them, make sure you’re getting every discount you’re eligible for.
By first understanding how much you spend every month and then being able to save a few dollars here and there, you’ll be able to save for your future (even when life feels weird and uncertain). And when things pick up again, you’ll have created great budgeting and savings habits that could help you out for years to come.