Home Savings: How to Save Money on Energy this Winter

Winter is here and you may have noticed that some of your energy bills have started to go up. It is this time of the year that almost everyone starts using more energy to heat their homes. There are quite a few easy steps that homeowners can take to cut back on energy bills this winter. Here is a combination of do-it-yourself projects and some professional upgrades that will cut down on your monthly expenses while still keeping your home warm during the coldest months of the year.

Install a Programmable Thermostat

Saving on energy bills is not just about keeping a home at the right temperature, but only having the furnace or heater on precisely when it is needed. A programmable thermostat allows residents to set the temperature that they would like their home to be at as well as set timers. Instead of leaving the heater on all day, it will only turn on just before anyone gets back from work or school. You can also set the temperature in different rooms that way the rooms that you are currently using or using the most will stay warmer. By limiting the heat in the rooms that are used less, it will allow you to save money on your energy costs while at home.

Utilize Your Fireplace

Many homes don’t have a traditional fireplace anymore, but if you have one, you will save a lot of money if you utilize your fireplace. This will provide you the possibility of turning your furnace off or at the very least turn it down as your fireplace should be able to heat your whole home and allow you to save money on your energy costs each month.

Push Back the Curtains

Winter may seem like a bad time to keep the curtains open, but natural sunlight can still heat up a home considerably. On sunny days, a family should push back the curtains on west and south-facing windows each afternoon in order to heat the home by a few degrees. As an added bonus, energy efficient windows will still help to keep the house insulated from the outside weather while allowing sunlight to get in. 

Plugging Leaks

Depending on the age of a home and how well it was constructed, the average house is losing around 10 percent of its heating efficiency through small cracks and leaks. This weekend project should begin by caulking or weather-stripping leaks around any major doors and windows. Old vents, pipes, and electrical wires may also be letting in cold air if not properly sealed.

Install New Insulation

Due to the fact that heat travels up, an attic is a prime location for improving on one's energy bills. Within most homes, insulation in the attic will need to be changed at least every few years, but the attic's insulation should be inspected at least once a year for any damage (Source: Great Canadian). For some families, this will improve the heat retention of a home by as much as 20 percent. 

HVAC Tune-Up

HVAC systems are relatively complex and should be serviced and maintained at least once a year, preferably well before the cold weather sets in. Professional maintenance will include steps such as checking ducts for leaks, tightening belts, topping off fluids, and checking the accuracy of the thermostat. A professional HVAC technician is also needed to achieve the right balance for fuel and air for a furnace's pilot light.

Just because the weather is changing does not mean that a family needs to break the bank in order to keep their home comfortable. Some easy preventative steps are all that is needed to keep any building insulated and warm throughout the winter.

Five Secrets to Negotiating Lower Payments with Creditors

Debt can pile up quickly and soon get overwhelming to keep up with. If you get buried in debt and can't pay your bills, an option may be to negotiate lower payments with your creditors. That won't always be easy, and you will have to convince those creditors that taking what you can offer is the best deal they will get. However, there are a few ways you can make this process less stressful and more effective. Here are some ideas to get you started on lowering your debt:

Put bankruptcy on the table

Car and home loans are secured by property, and if you can't pay your bills, those lenders will simply seize your collateral. The creditors you will be negotiating with are likely to be unsecured creditors such as credit card companies. Those companies could be left with nothing in a bankruptcy and may be more willing to negotiate to get something rather than nothing. Be sure to talk to financial experts before doing this.
Aim low

Most unsecured creditors will take half or less of what they actually are owed, so you should start low in your negotiations. If you can afford to pay 30 percent, start by offering 10 or 15 percent. The worst thing that can happen is that the creditor says "no." Starting too high may lock you in a position to pay for more than you can handle and leave with feeling like there is no way out. You might be surprised about how low you can go with negotiations.

Use a third party to negotiate on your behalf

Ideally, you would hire a lawyer or another company to negotiate with creditors on your behalf. Such businesses negotiate on your behalf with creditors and can help you get the best of the deal so you can move on from your financial troubles quicker. They know the business more than you do, and they can often get better deals that you wouldn't even come close to on your own. This can help you get back on your feet quicker and not stress as much during the process of becoming debt-free.
Focus on the worst debts

You likely won't be able to negotiate a cut in all your debts, so focus on the ones that will offer you the most relief. Debts with the highest interest rates and those that are the most overdue should be the ones you focus on first. While this is not always true, it is often the best decision to save you more money in the end. Once you have your big debts paid off, you can continue using the same amount of money to pay off smaller debts quicker.

Show evidence you can pay

Creditors will be more likely to consider negotiating with you if there is evidence you will be able to pay the reduced amount. No creditor wants to spend the time and energy negotiating a debt-reduction agreement only to find out the debtor can't pay anyway. Build up the money you need to pay debts and offer to pay your reduced amount on the spot. Creditors may be willing to go lower if they will get the money right away.

Keep in mind that debt reduction and settlement is not a silver bullet. Even if you lower your payments, your credit score will take a big hit and your accounts will be canceled. However, the effort is still worth it if it keeps you out of bankruptcy. If it does come down to bankruptcy, be sure to work with financial experts to help you through the process for the best outcome.


Informational credit to D Thode & Associates.

Four Mistakes to Avoid During Debt Consolidation

Many American families are being financially destroyed by debt. With the recent economic slumps and increases in interest rates, many people saw what they’d thought was manageable debt become a mountain that loomed over their future. Debt consolidation offers hope for people in this situation.

Debt consolidation has certain pitfalls, just like every other financial decision. The following are four of the most common mistakes that people make when going through this process.

Paying More to Consolidate

Many people assume that they will automatically save money in debt consolidation. This is not always the case. While the monthly payments may be lower, they often come with higher interest rates. Even if the interest rates are lower, paying over a longer period of time leads to more interest paid over time. Use an online debt consolidation calculator to see whether you will save money in debt consolidation or end up paying more.

Another way you could end up paying more is by using an inexperience debt consolidation company. Acting too quickly and failing to investigate a company’s claims can result in you paying far more to consolidate your debt than you should. Additionally, this course of action often results in constant harassment from bill collectors, adding even more stress to the debt consolidation process.

Not Dissolving Credit Accounts

If you decide to go forward with consolidating your debt, you would do well to be fully committed. An expert from Faber Inc says it’s much harder to break out of debt when you have credit cards and accounts in use. Immediately after these accounts are paid off, they should be closed. Failing to do this could lead to ending up deeper in debt than when you started. The best way to avoid the temptation to fall back on credit is to remove it completely—this may result in some serious restructuring of your budget, but will be the best move in the long run. 

Using Your Home or Other Major Assets as Collateral

Many people use a home equity loan or refinancing to consolidate their debt. It's easy to see why this sounds attractive. Mortgage rates are relatively low, often far lower than credit card interest rates. However, you are putting your home on the line for an amount of debt that is usually nowhere near its value. If you ever cannot make the payments, you risk losing your home over a relatively small amount of debt. For most people, this is much too risky to attempt if there is any chance that payments may not be met on time. 

Keeping the Same Lifestyle

Debt is often a symptom of a much larger problem. If you routinely rely on credit, you are not living within your means. Examining your average monthly expenditures and using this to create a budget plan is a great way to get started on cutting back. Make changes to your spending and your expenses to avoid acquiring new debt while you struggle to pay off the old. Maintaining these new spending habits will also result in long-term savings and a much healthier financial future. Many people who find themselves deep in debt worry about repeating the cycle for years to come—by forming healthy financial habits now, you can avoid a future in debt.

Debt consolidation can help people to dig themselves out of a hole. Because of this, many people don't pay attention to potential drawbacks of the process. Educate yourself before beginning this process to avoid these common mistakes, and debt consolidation can help put you on the path to a healthy financial future.

Debt Management: Is Settling Right for You?

You've probably heard the claims of companies able to "settle your debt for pennies on the dollar." If you feel like you're drowning in debt, that probably seems like an attractive option. Though the financial relief that comes from no longer having your debt is a huge step forward, the hit that your credit score will take may make you change your mind. Carefully consider all of your options before you make a decision to settle debt.

Debt Settlement Companies

A debt settlement company acts as an intermediary between you and the companies to which you owe money. They'll ask you to stop paying your bills and send them a monthly payment, instead. Part of this monthly payment is a fee to the company, and the other part goes into an escrow account for making the settlement. The settlement company will then contact your creditors and offer to make a settlement.

Perhaps the biggest downside to this method is that you're actively ignoring your bills without telling the creditors what you're doing. All of these missed payments will go on your credit report, where they will stay for seven years. As your payment history accounts for almost 35% of your credit score, even a single delayed payment can drastically lower it. This can be especially devastating for those with good credit. However, the debt relief that can come from settlement is significant and may be the only option for one who has found themselves deep in debt. A bad credit score can be recovered, while debt may increase over the years if it is not taken care of early on. 

DIY Debt Settlement

Another option is to eliminate the middle man and contact your creditors by yourself. To do this, you need to be able to pay the settled amount immediately, so save up a chunk of money or use your tax refund. When you have that money saved up, call the company and make them an offer. Like working with a debt settlement company, this method typically works better when you've missed several payments. At that point, the creditor may have written off your debt, or feel that it's better to take whatever amount they can get. This method may work better on debt that came from a sudden unexpected expense, such as medical expenses. Those who have incurred debt over time, as is often the case with student loans, would do best to seek professional financial advice for their settlement.

Not everyone is equipped to handle their own settlement. Unless you have considerable financial knowledge (and, preferably, a legal background), you should seek professional advice before you go forward on settling your own debts. When it comes to debt and money management, a small mistake can end up costing your for years to come. 

Impact on Your Credit

Not paying your bills has a huge impact on your credit score, and in order for debt settlement to work, you usually have to stop making payments for a while. For example, a payment that's 30 days or more late can reduce your credit score by 50 points. When a payment is delayed even longer—and you have more than one account that's reporting late—the results can be even more significant. The company will also report that you've settled to the credit bureaus, which some might perceive as a risk.

Debt settlement can work for many people, while others should look into other options. Consulting with a financial advisor, who can assess your unique financial situation, is the best way to know where you stand and what option is the right one for you.

Informational Credit to Hudson & Company Insolvency Trustee Inc.