How Can I Lower My Monthly Bills?

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Many families are struggling to make ends meet right now, thanks to the economic fallout from the Coronavirus/Covid-19 pandemic. Widespread business closures have left countless Americans – many of whom were already struggling when the virus began to mount across the nation – out of work and unsure how to pay their bills.

If you need help lowering your expenses due to Covid-19, or if you've been meaning to tighten your household budget for a while, here are several areas where you may be able to trim the fat.

Utilities

When it comes to utilities, there are several small changes you can make to lower your monthly bills.

Take a look at your internet and cell phone bills to evaluate your current service plans. Do they meet all your needs? Are there features you're not using? If you aren't using all of the plan's bandwidth, data, minutes or features, consider less-expensive plans with fewer bells and whistles.

Chances are you don't have a choice in providers for services such as electricity, gas and water, but you can take small steps to reduce your usage. For example, you can set the temperature a few degrees lower in the winter or higher in the summer to save energy or make sure your water heater is operating efficiently. Many utility companies offer free or low-cost energy assessments in which they inspect your home and point out fixes that could improve your energy-efficiency.

Other steps you can take include:

• Caulk small openings or cracks near plumbing pipes, vents, drains and fireplaces. Check your windows and doors for air leaks and add weather stripping to seal them. You can often feel a leak with your hand, or try lighting a match, candle or incense stick to see if the smoke changes direction around doors and windows.
• Open blinds and curtains during the day in the cold months to capture as much sunlight and warmth as possible. In the summer, close windows, blinds and drapes to block daytime heat. Open windows at night when the air is cooler and use your air conditioner sparingly.
• Turn off lights and devices when you leave a room. Replace standard light bulbs as they burn out with compact fluorescent, halogen or LED lights. Although they're initially more expensive, these new types of bulbs are designed to last much longer and use less energy over time.

When it comes to utility payments, many service providers have announced temporary halts on service shutoffs for customers who are unable to pay their bills. Additionally, many companies are willing to work with customers to establish payment plans or provide other aid.

Insurance

When was the last time you looked at your insurance policies? Whether it's life insurance, car insurance, homeowners insurance or renters insurance, you should review your policies each time they come up for renewal. Take the time to shop around for a better deal. Insurers are betting that once you have a policy, you'll stick with it and never check to see if you could buy similar coverage elsewhere for less. The truth is, with a little research, you may be able to lower your premiums.

Bundling your policies is another tactic that might save you some money. Many (but not all) insurers offer a discount if you have two or more policies with their company.

Additionally, tell your insurance agent if you've made improvements to your home, such as adding a security system or a new roof. These upgrades could qualify you for a discount on your premiums. For auto insurance, make sure your policy is closely aligned with your average annual mileage; if you no longer drive as much, you might not have to pay as much. Don't forget to ask about discounts for multiple cars, safe driving (no tickets or accidents) and good grades for your driving-age teenagers.

Finally, check with your insurer to see if they're offering any aid related to Covid-19. Some providers have rolled out discounts on auto insurance, since most Americans are practicing social distancing and driving less. Others have extended policy cancellations until April 30 or later if you're unable to pay your premium. Contact your provider to see if help is available.

Credit cards

If you have credit card debt, you could be spending large sums of money each month on interest alone. One way to reduce your monthly interest payments is by using a balance transfer to move debt from your existing accounts to a new account with a lower interest rate.

First, you'll need to do some research to find a credit card with a monthly interest rate that's below the rates on your existing cards. Many cards offer an introductory interest-free period for the first month or so, followed by a lower-than-usual interest rate for the first year. This gives you a head start in paying down the debt before it starts racking up interest.

Even though you'll transfer your existing debts to the new card, don't close the old accounts. Keeping accounts open for a long period of time – even if they're not carrying a balance – can be good for your credit scores.

Now, take the full amount you were paying before – including interest at the old, higher rate – and pay that toward your balance on your new card.

One thing to watch out for, though, is that some cards will charge a one-time fee and/or an additional 2 to 4 percent for balance transfers. You'll want to avoid these because paying a fee or more interest is the last thing you want to do.

In good economic times and bad, it pays to be proactive in trimming your bills, whether that means lowering utility costs, insurance premiums or credit card debt. Relief may be available from your providers, but it's up to you to do your research, identify your options and ask for help if you need it.