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5 Tricks That Will Save You A Small Fortune

As a result of living costs and lower wages, many families have found new and creative ways to save money. Among them are stocking their fridges to reduce energy bills or taking advantage of special mortgage refinance programs.

If you need help right away, this relief program will direct deposit a short term loan into your bank account. Review the terms of this funding closely before accepting these funds.

In this article, we explore some money saving tricks that can help homeowners and renters. When used together, they can help families save as much as $2,000 each month. In some cases, they can also help them make some extra money.

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Reduce your utility bill

Utility bills are one of the largest expenses families have to deal with every month. However, there are a few ways diligent households can slash these costs significantly, thus saving thousands of dollars each year.

The first thing households can do to reduce their utility bills is to make sure no electric or electronic device is plugged when unused. Except for vital appliances such as fridges and air conditioners, most devices can be safely unplugged. Unplugging them can save households between $100 and $200 each year. Doing so also protects appliances and other devices from power surges, which in certain circumstances can cause them to become permanently damaged.

Next on the list is replacing normal light bulbs with energy efficient ones. Incandescent light bulbs consume much more energy than compact fluorescent bulbs, known as CFLs, or LED bulbs. For example, running a single incandescent bulb five hours a day for a year costs around $16. By comparison, a LED bulb that runs five hours a day for a year will cost only $6.

On average, a house has around 45 light bulbs, which means that homeowners and renters can save up to $450 each year just by replacing their bulbs. An important side effect of replacing incandescent light bulbs is that CFLs and LED bulbs produce at least 75 percent less heat. As a result, HVAC and air conditioners will have to spend less energy maintaining temperatures, thus further reducing electricity bills and extending their life.

Finally, people can also rely on home automation and smart devices to make sure energy is used as efficiently as possible. It is quite common for families to leave the TV on when no one is watching, for example. Timers and smart outlets can automatically turn off devices under certain circumstances or at designated times. Smart thermostats can also help manage energy more efficiently by adjusting temperatures while the house is empty.

These recommendations may seem small on their own. However, when added up, they can help families reduce their utility bills by up to $50 each month.

Save money with a FMERR mortgage refinance

Homeowners who have a mortgage with Freddie Mac can save thousands of dollars a month through the Freddie Mac Enhanced Relief Refinance Program or FMERR. This program was created after the Great Recession to help borrowers whose homes had lost value, or those who despite paying their mortgage on time had not benefited from rising home values. When this happens, homeowners often find themselves underwater, which means that their outstanding loan balance is higher than the home’s value.

Read our article about how to refinance your mortgage to learn more about the process and what homeowners must consider along the way.

In either case, homeowners would not have enough equity to qualify for a standard refinance. In general, lenders require at least 20 percent equity before approving a mortgage refinance. The Freddie Mac Relief Refinance Program has no such requirements, helping homeowners who are stuck with high interest rates. Those who refinance using the FMERR can lower their interest rates by as much as two points. For example, a homeowner who took a $200,000 mortgage to buy a home with 6 percent interest would pay $1,200 each month. By refinancing through FMERR, they can lower interest rates to 4 percent. Their new monthly payment amount would be around $900, and they would save around $100,000 in interest paid over the life of their loan. As a result, they can save as much as $3,600 each year.

The Freddie Mac Relief Refinance Program does have some unique requirements potential applicants must meet. For example, homeowners must be in time with their monthly payments,their loan must have originated on or after October 1, 2017, and at least 15 months must have passed since the first mortgage payment was made. This means that homeowners who purchased homes before October 2017 are not eligible. Also, those who are must hurry up, as this program will end in September 2019. However, the federal government will most likely announce new programs to help homeowners who are underwater.

Rent out spare rooms or spaces

According to the U.S. Census Bureau, around 36 percent of the population is renting rather than owning. Yet a significant number of homeowners still have unused space inside their homes. Taking advantage of this unused space has become more common as homeowners seek new ways to make money. Renting a room to tenants and tourists can help families make an extra $700 each month, or more, depending on their location and which other benefits they offer to potential renters.

However, renting rooms is not the only way to make money with a home. In some cases, families can take advantage of services like AirBnB to not only rent rooms but also entire properties for weeks or even months. Why use AirBnB instead of becoming a traditional landlord? Because, on average, AirBnB renters rean up to five times more money than traditional renters. Also, homeowners who rent through AirBnB do not have to follow local regulations when setting up prices.

To market on AirBnB, homeowners must create and account and meet other quality guidelines. The company has minimum requirements landlords must meet before their properties become eligible for the service. Once they do, landlords can start receiving tenant applications through the service.

There are some things prospective landlords must consider. First, income receive through AirBnB must be reported to the IRS just like any other irregular job, such as driving for Uber. This means that landlords must make sure their pricing is enough to cover repairs, maintenance and improvements while still generating some profit after taxes are paid. In some states, AirBnB tenants can deduct these expenses from their taxes, increasing the amount of money they can pocket.

Second, prospective landlords must inform themselves about local regulations against such practices. In Florida, for example, state law and regulations are blurry and tenants are often asked to vacate properties if they rented through AirBnb or similar platforms. Such laws are put in place to protect traditional tenants and keep rent prices from rising. Prospective landlords must keep an eye out to avoid potential legal issues.

Finally, tenants who prefer not to rent bedrooms can choose to rent storage areas or garage space instead. Short-term rental platforms are not focused on bedrooms and apartments exclusively.

Stock up your fridge

Fridges operate just like air conditioners. This means that the closest the temperature of a space is to the desired target, the fewer energy these appliancers will have to spend in the process. An air conditioner cooling or heating an empty house with open windows will require more energy than a house with closed windows and full of objects.

The same principle applies to fridges. An empty fridge will use more energy to maintain lower temperatures than a full fridge. The reason is that food placed in the fridge maintains lower temperatures more efficiently and for longer periods than air does. Also, opening an empty fridge will make cool air inside interact with warm air outside, raising temperatures significantly. This does not happen with food and other products, as solid objects are more resistant to fast temperature changes.

One way to make sure fridges are using as little energy as possible is to keep them stocked up as much as possible. Anything that can be stored in the fridge should be placed there. This includes vegetables, fruits, and other perishable foods. If there isn’t enough food around, families can use pitchers of water instead, which are as efficient and do not require going to the grocery store. Also, it is recommended to set the fridge’s temperature to between 36 and 38 degrees Fahrenheit for maximum efficiency.

Save on home repairs

Many homeowners are unaware of the fact that their home insurance will not cover the cost of replacing a broken home appliance. Also, most do not have the cash to cover this expense when it takes place. The best way to be protected against such an emergency is by purchasing a home warranty program.

Home warranties, also known as home service contracts, are insurance policies that cover the cost of maintaining and repairing malfunctioning home appliances. Some policies even cover a potential replacement. Families can save thousands of dollars in expensive home repairs with the right home warranty plan.

Read our article to learn which home warranty companies offer the most affordable and comprehensive home service plans.

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