The average American household currently pays $1,487
per month on their mortgage, according to the U.S. Census. That’s almost $18,000 per year and that’s not all consumers are spending big on. Car finance, taxes, and healthcare are also costing Americans big sums of cash every year. But there’s no need to let these things rule your life
as there are ways you can pay them off quickly so you head towards a debt-free life.
Barter your costs
32% of workers have medical debt, according to CNBC. This is unsurprising considering the average Medicare hospital bill is $11,700. One way to pay this debt off quicker is to barter. For example, if you’re being charged $8,000 for an MRI, this is the hospital’s chargemaster rate. This figure is usually four times higher than the standard cost. Avoid paying this inflated price by calling the hospital up and bartering for a more reasonable and fair cost. You’ll be amazed at how easily they back down and lower your bill. You can even get your tax bill reduced so you pay it off quicker. This is called an Offer in Compromise (OIC) and must be accepted by the IRS, but it’s a good way to lower your costs.
The average amount people have saved is between $11,250 and $27,910, depending on their age. This is a large sum of cash that you can put towards your mortgage. If you have savings like this, consider making regular lump sum payments to reduce your mortgage. This will lower the amount of interest you pay and could result in you being mortgage-free faster
. Check your early repayment fees though as these can bump up how much you’re charged. Overpayments are also beneficial when you have a car on finance
. When you do this, the vehicle will become your personal asset sooner and your debt will be repaid quicker, meaning you pay less than you were originally quoted.
Monitor your payments
1.5 million mortgage holders are delinquent on their payments, states Fox News. Delinquent payments are common across all sectors where there are high charges. To ensure you’re on the road to being debt-free you need to keep a close eye on all of your payments. Just one missed payment can add hundreds if not thousands to your debt, even if the missed payment wasn’t your fault. A missed mortgage payment will affect your credit score which, in turn, will affect your rate when you re-mortgage. You’ll also be given a late fee to pay. This is standard procedure on auto loans, tax bills, and medical bills too. Always check that your monthly payments have gone out. If they haven’t, swiftly contact the organization you owe and pay up.
Every year, Americans spend a vast sum of cash on crucial things such as their mortgage and healthcare. This is stopping most of them from becoming debt free. But the good news is that these tips will help you pay off your biggest bills swiftly.