1 in 5 Americans Is Planning a Risky Financial Move to Survive. Do This Instead

That includes 18% who plan to go deeper into credit card debt, 18% who may tap into their retirement savings and 17% who might resort to borrowing money from family or friends.

While strategies like these can provide a quick cash injection, they also have the potential to seriously damage your long-term fortunes. Here are five things you can do instead to find relief.

Rethink your budget

Asking your loved ones for money can make family get-togethers extremely awkward, even over Zoom. A strained relationship can also have a financial cost, as your friends and family will be less keen to babysit or help you fix the front porch.

With a bit of scrimping and some smart shopping, you may be able to avoid that difficult conversation, or at least reduce the amount you need.

Start by creating a list or spreadsheet of all your monthly expenses and identifying any nonessential items you can cut out for the time being.

For example, cancel any subscription services that you don’t use regularly. You can always re-subscribe later, and you may even qualify for a free month or two when you sign back up.

Next, try to reduce the cost of your essentials. Check out a few different grocery stores in your neighborhood, as prices can vary a lot between supermarket chains.

The same strategy can be applied to other key expenses, like your car insurance. By comparing rates from multiple insurance companies online, you may be able to save more than $1,000 a year.

Trade in your high-interest credit cards

Although you might be tempted to coast by on your credit cards until your financial situation turns around, credit card debt is a tough hole to climb out of — especially if you’re only making the minimum payments each month.

Unlike most personal loans, credit card interest rates can be painfully high: over 20% in some cases. To make matters worse, credit card interest compounds, which means that unless you pay off your balance in full each month, you’ll end up owing interest on your interest.

However, if your credit score is in decent shape, you may be able to trade in your high-interest credit card debt for a new loan at a much lower rate.

With a debt consolidation loan, you can pay off all of your current debt immediately. Then you’ll only be responsible for a single monthly payment at a more affordable interest rate.

Depending on how much interest you currently pay, consolidating your credit cards could save you thousands of dollars and help you become debt-free years sooner.

Refinance your mortgage

After hitting record lows 17 times in 2020, mortgage rates continue to sink lower and lower.

If you’re a homeowner and you haven’t recently refinanced your mortgage, you may be able to save hundreds of dollars a month by trading in your existing home loan for one of today’s bargain rates.

Similar to debt consolidation, you’ll need to have a solid credit score to qualify for a refi. It’s also recommended that you have at least 20% equity in your home.

As of last month, there is now a 0.5% fee for refinancing, although you may be able to avoid it if you follow our advice.

Just remember that different lenders offer different rates, so it’s a smart move to compare at least five offers before you commit to one. Shopping around for rates can make a $3,000 difference in how much you save over time, according to the government-sponsored mortgage agency Freddie Mac.

Use a price-checker when you shop online

With lockdown measures still in effect, you’re likely doing most of your shopping online these days. That includes purchases big and small, essentials and luxuries.

And while big retailers like Amazon and Walmart make it possible to get everything you need in one order, that convenience will cost you.

Unless you take the time to price-check every item in your cart against other retailers, you’ll probably wind up spending a lot more than you need to when you click the “buy” button.