Strategy 55 of 107
Phone or internet discount through Lifeline
What it is
If you get SNAP, Medicaid, SSI, federal housing help or a Veterans pension, or have low income, apply for Lifeline.
Steps
- If you get SNAP, Medicaid, SSI, federal housing help or a Veterans pension, or have low income, apply for Lifeline.
- It takes a discount off a phone or internet bill each month.
- Send the discount to principal.
Repeat: Monthly, renewed yearly.
Measure: Monthly discount.
Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- One discount per household.
- Small amounts; it works best stacked with others.
Who it fits
Average household, Single, No high school diploma, No college degree, College students, Grandmas and grandpas (62 and over)
Needs
Limited income
How predictable
Most predictable: once in place, the payoff date is arithmetic
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: if you get SNAP, Medicaid, SSI, federal housing help or a Veterans pension, or have low income, apply for Lifeline.
Suppose it brings $600 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 16 years 3 months instead of 30 years, saving about $196,219 in interest. To finish in five years, they would still need about $3,374 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sequences that use it
- Bill-cutting stack for 65 and over: Programs built for limited incomes, applied for together. The bills that shrink become principal payments.
Sources and more information
Where to get help
- CFPB: Find a HUD-approved housing counselor (free or low cost) consumerfinance.gov
- USA.gov: Government benefits usa.gov
- CFPB: Submit a complaint about a lender or servicer consumerfinance.gov
Related strategies
- 54. Energy bill help through LIHEAP
- 56. Raise insurance deductibles once a reserve covers them
- 53. 65 and over with limited income: let a Medicare Savings Program pay the premiums
- 57. Re-shop auto insurance and send the savings to principal
- 60. Claim your state's property tax credit or circuit breaker
- 66. Audit the servicer: make sure every extra dollar hit principal