In the week that ended on March 28th, a record 6.6 million Americans filed for unemployment benefits. That’s a 3,000% surge since early March, and it just goes to show how devastating coronavirus has been to our economy and particularly non-essential industries like retail, hospitality, and travel.
As we all know by now, closing everything comes at a huge cost for businesses and people who work in non-essential and essential jobs. While millions have been financially devastated already, even those who manage to stay employed throughout this disaster could be required to take a major cut in pay.
You may not have the freedom to run out for a $5 coffee every day, but facing a loss in income — or having to worry about losing your job — can easily make you feel like all the walls are closing in. Fortunately, you do have some power when it comes to saving your financial future. By cutting your expenses, you can make your money last longer or build an emergency fund that can help you sleep better at night.
As a side note, if you’ve already lost your job and you need access to some money to pay bills in a hurry, there are plenty of ways to make money fast. And if you’re able to cut your expenses and earn some money on the side, you’ll be even better off.
15 Ways to Cut Expenses Right Now
Cutting your expenses comes with huge benefits for your finances, mostly because this strategy allows you to get by while earning less. And if you do wind up losing your job, having lower expenses will allow you to stretch your emergency savings as far as they can go.
If you’re wondering about the best ways to cut your expenses for maximum effect, here are some of the most important strategies to consider implementing right away.
Refinance Your Mortgage
Today’s record-breaking interest rates can also help you save big if you’re able to refinance your mortgage. Further, the best mortgage refinance companies of 2023 offer exceptionally low rates and quick closings that can even take place in your home.
Keep in mind that refinancing your mortgage can help you secure a lower monthly payment, lower interest costs over the long haul, or both. However, you do need to have an income to qualify for a new home loan.
Refinance Student Loans and Score a Lower APR
Interest rates are once again hovering near all-time lows, which makes now a great time to refinance your debts if you have the income to qualify. With student loan refinancing, for example, you can refinance federal or private student loans with a new lender that might offer you a lower interest rate, a lower monthly payment, or both. Just remember that you’re giving up federal benefits like deferment, forbearance, and income-driven repayment plans if you refinance federal loans with a private lender.
Where should you consider refinancing your student loans? The best student loan refinance companies offer low-interest rates and low fees (or no fees) for qualified buyers, so make sure to compare all of your options. Some student loan refinancing lenders can offer rates that are much lower than you could get with federal student loans, although you do need good credit or a cosigner to qualify.
Consider a 0% APR Credit Card or Debt Consolidation Loan
If you have credit card debt that’s lingering at a high-interest rate, you can also consider a new loan or credit card that can help you save. With a 0% APR credit card, you can secure 0% APR for anywhere from 12 to 21 months, although a 3% or 5% balance transfer fee normally applies. Still, you can secure considerable interest savings even after paying a balance transfer fee. After all, avoiding interest on your credit cards for a year or more could help you avoid paying exorbitant interest rates during your credit card’s introductory offer, and you get the benefit of paying down debt faster.
A debt consolidation or personal loan can also help you consolidate and pay off credit card debt faster while saving money. Many debt consolidation loans come with rates as low as 5.99%, which is significantly lower than the rates credit cards charge.
How much can you save with a personal loan? That depends on how much debt you have and your current interest rate but consider this example.
Imagine you have $10,000 in credit card debt with an APR of 18%. If you were able to pay $250 per month, you would pay this amount down over 62 months and fork over $5,386 in interest in the process.
Now, imagine you found personal loan rates as low as 5.99% on a five-year personal loan. With this rate and the same amount of debt, you could pay just $193 per month for five years, and your total interest paid would only be $1,596. That’s a savings of more than $50 per month and almost $3,800 over five years.
Ask Your Credit Card Issuers for a Lower Interest Rate
If you have credit card debt, but can’t qualify for a debt consolidation loan or new credit card, also consider reaching out to your credit card issuer to ask them to reduce your rate. Many major banks have hardship programs for customers struggling with the implications of coronavirus right now, so you may be surprised at what they can offer.
As an example, the American Express Financial Hardship program page says you may be able to qualify for a lower monthly payment, a lower interest rate, and other benefits if you simply call in and ask.
Shop Around for Insurance or Alter Your Current Policies
Many insurance providers are offering special rebates right now due to coronavirus, including refunds on a percentage of your auto insurance premiums. In fact, two insurers — Allstate and American Family Insurance — have already announced they’re giving $800 million back to customers this year. This only makes sense since most of us are hardly driving right now, if at all.
If your auto insurance company isn’t voluntarily offering this type of rebate, you should definitely call and ask. In the meantime, spend some time getting quotes and comparing pricing for other auto insurance policies as well as homeowners insurance or renter’s insurance.
Remember that you’ll save the most money if you spend time shopping for a lower price at least once per year. Also, consider bundling multiple policies with one provider to save money, and ask about other discounts that may be available.
Get Rid of Subscriptions You Don’t Need
Tons of new subscription services have become available over the last decade, but you may not want to continue paying for ones you don’t necessarily need. While you can go through your credit card bills to see what you’re subscribed to manually, a service like Trim can do the grunt work for you.
Not only does Trim negotiate cable, internet, phone, and medical bills, but it also cancels old subscriptions you’re not even using. The app also analyzes your spending patterns to figure out steps you can take to save even more. Best of all, signing up for an account with Trim is 100% free.
Cancel Memberships You’re Not Using
Consider other memberships you could cut from your life, including gym memberships, massage memberships, or memberships to a wholesale club. Being locked down for weeks has drastically changed the way many of us live, and that’s especially true when it comes to places we would normally pay to belong to.
If you’re stuck at home, there’s no reason to continue paying for memberships you can’t even use for months at a time.
Switch to Streaming Television
Still paying for a pricey cable subscription? There are a ton of lower-cost options to consider that will provide just as much entertainment value, ranging from Hulu Plus to YouTube TV.
If you’re ready to ditch cable television, make sure to figure out which services will provide the kind of television you watch the most. Netflix has an unlimited streaming option for $8.99 per month, and you can get Hulu starting at just $5.99 per month. With these two options alone, you should have access to more television and movies than you could ever feasibly watch.
Cook at Home and Avoid Takeout
Even if you’re someone who loves cooking at home, there’s still the temptation to order takeout in areas where restaurants can remain open for carry-out and delivery. If you want to save money, make sure to limit takeout dining to only a few times per week.
Having extra time at home is the perfect opportunity to learn new cooking techniques or try new recipes, so make sure to take advantage. At the very least, stick to the core staple meals you already know how to cook and spend time in the kitchen at least five nights per week.
Create a Meal Plan and Stick to It
Creating a meal plan can also help you stay on track with your food savings goals, and that’s especially true if you’re ordering groceries for delivery through a service like Shipt or Instacart. Spend some time figuring out the main ingredients you need for breakfast, lunch, and dinner for the week, leaving a few days open to eat leftovers. From there, craft a grocery list that includes the ingredients you need and nothing more.
Having a meal plan will ensure you’re not buying convenience foods or ordering takeout because none of the ingredients you have go together for a meal.
Consider a Discount Cell Phone Service
If you are paying a premium for a luxury cell phone plan, now is an excellent time to look for a cheaper alternative. With Ting, for example, you only pay for the cell phone service you actually use, and a single cell phone line starts at just $6 per month. If you added on 100 minutes of talk, up to 1,000 texts, and up to 500MB of data for the month, your monthly cell phone bill would only be $24.
Make sure to consider other discount cell phone providers in your area so you can find the coverage you need for a much lower cost.
Shop Around for Cheaper Internet
Check for cheaper internet options in your area, although companies that provide service regionally can vary quite a bit. Major players on the scene include Comcast, AT&T, and Verizon Wireless, but make sure to check out satellite internet options like DISH Network.
Stop Shopping Online
Online shopping is becoming extremely convenient and easy, and those purchases can add up surprisingly fast.
If you’re worried about your online shopping bill, one step you can take now is to remove your credit card information from all your favorite shopping sites. Yes, this means removing your credit card bill from your Amazon Prime Account, as well as your Walmart shopping account, your Boxed.com account, and any other websites you like to browse when you’re bored.
When you force yourself to enter your credit card details manually for each purchase, you’re bound to think twice about your spending and save money over time.
Use Apps to Earn Cash Back
If you do have to buy items online, make sure you’re using coupon codes or cashback portals to maximize your necessary spending. Rakuten is a great website to use if you want to earn cash rewards on shopping, and so is the Dosh app.
Give Up Habits Like Smoking and Drinking
Finally, give up pricey habits like smoking and drinking. Both can lead to negative results for your health over the long haul, and both come with considerable financial costs as well.
Instead of smoking or drinking, try to pick up new habits that can improve your life while you save money. Invest your cigarette savings in a new FitBit and start walking 10,000+ steps per day, or pick up a new hobby you can do at home, like woodworking or gardening.
The Bottom Line
Whether you have lost your job or simply worry you might, cutting your expenses right now is probably a smart move. Lower expenses will help you save more money at a time when cash is king, and having lower expenses can also make your savings last longer if you do wind up losing your job.
Times are tough right now, but you do have some power to control the financial impact of coronavirus. Cutting your expenses is one piece of the puzzle, but make sure to look for ways to boost your income, too.