Deevra Norling | March 15, 2024
Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.
Summary: If you’re struggling with debt, here are some expenses you can cut down to save money and pay off your obligations: cut energy costs, eat out less, cancel unnecessary subscriptions, shop around for cheaper insurance, and review interest rates. If you’ve been sued for a debt, SoloSettle can help you settle the debt before going to court.
A new year inspires new goals, and for many, reducing debt is one such goal. If you feel like you’re drowning in a sea of debt, it can seem nearly impossible to surface from it.
One way to tackle overwhelming debt is to pay more than the minimum monthly premiums. To do that, you may need to free up extra cash to put toward paying off debt. This means cutting down on expenses. But where do you start, especially in a tough economic climate? Here are five ways to reduce expenses and free up money for debt repayment.
The average American spends around $315 a month on utilities, including electricity, natural gas, water, trash and sewer services. That amounts to $3,780 per year.
In 2022, rising inflation and supply chain pressures impacted energy prices globally. By August, the cost of powering the average American home rose by 15.8% compared to August last year, reaching the highest levels seen in 15 years.
Unfortunately, there’s more grim news as prices are expected to increase further in 2023. The U.S. Energy Information Administration forecasts that residential electricity prices will likely increase from 15.02 cents per kilowatt-hour (kWh) to 15.39 kWh.
Soaring energy costs are putting a tighter squeeze on household budgets, making it harder to keep up with debt repayments. So what can you do to reduce your energy use? Here are some ideas:
Most of us don’t think twice about grabbing something to eat on the go. But at the end of the month, $2 here and $5 there add up to more than you think. Want to know just how much you’re spending on eating out? Start tracking how every coffee, smoothie, lunch or dinner you buy in a month. The results may astound you.
It’s a habit that can be hard to break, but if you’re committed to getting rid of debt, swap the takeouts for a home-cooked meal and pack a lunch for work. Cooking meals at home usually works out cheaper than eating out.
A survey conducted by C+R Research found that most consumers underestimated how much they spent on subscriptions by $133. On average, most respondents pegged their monthly subscription costs at $86 but discovered the actual cost was closer to $219.
That’s because many people forget about some of their subscriptions. As many as 42% of consumers surveyed said they forgot about recurring subscriptions they no longer use.
When was the last time you reviewed your list of subscriptions? Do you watch all of the TV services you’re subscribed to? If not, cancel the ones you don’t use. The same goes for subscriptions to magazines, music streaming services, websites, and health and fitness clubs.
Many people adopt a set-and-forget approach to insurance. But shopping around for cheaper insurance at least once a year is a good practice.
While home, health and life insurance are optional, car insurance is mandatory in most states. You may think cheap car insurance is hard to find, especially if you have factors working against you, like a bad credit rating or traffic violations.
But by comparing car insurance companies, you could strike it lucky with a lower-priced policy, especially if there’s been a change in your circumstances. For example, if you now work from home and drive less, you could switch to mileage-based insurance. According to The Zebra, low-mileage drivers in California (a state with high auto insurance rates) could save up to 32% compared to high-mileage drivers.
In 2022, the Federal Reserve raised interest rates seven times. If you have a mortgage or car loan, you’re probably paying significantly more on these loans than you did a year ago, making it harder to reach your goal of being debt-free.
It’s time to review interest rates on your home and car loans. Compare lenders and refinance to a lender with a better rate. If you have credit card debt, try to eliminate this as soon as possible, as they tend to attract the highest interest rates. You can tackle this in two ways, with a debt consolidation loan or by setting up a debt management plan with a credit counseling agency.
There’s no denying that 2022 has been a tough year financially for many people. If you want to improve your financial situation in 2023, start by ruthlessly slashing expenses to free up money to redirect toward debt. Every cent you can put toward paying off debt moves you closer to debt freedom.
If you’ve fallen behind on a loan or credit card payment, chances are your credit score has taken a hit. Debt collectors may start calling non-stop to discuss paying off the debt. You might even get sued for the debt you owe. It can feel draining and hopeless.
But you’re not alone. SoloSettle, powered by Solosuit, can help you settle your debts and restart. Here’s how.
Debt settlement involves paying off a debt at a discounted rate. It is a form of debt forgiveness that benefits both creditors and consumers. The average consumer can settle a debt for 50% of the original debt amount, so settling can save you money and give you a new financial start.
If you’ve been sued for a debt, you can settle before going to court. Follow these three steps to settle a debt after being sued:
To learn more about these steps, check out this video:
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)
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Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
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