Strategy 54 of 107
Energy bill help through LIHEAP
What it is
Apply to your state's Low Income Home Energy Assistance Program for help with heating or cooling bills.
Steps
- Apply to your state's Low Income Home Energy Assistance Program for help with heating or cooling bills.
- The amount you would have paid on those bills goes to principal.
- Combine with free weatherization for a lasting cut.
Repeat: Each heating or cooling season.
Measure: Bill help received (enter as a yearly amount).
Try it in the calculator Enter its amount in "Yearly amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Funding runs out each year; apply early.
- Income limits apply.
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
Depends on people or program rules (tenants, family, IRS records, lenders)
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: apply to your state's Low Income Home Energy Assistance Program for help with heating or cooling bills.
Suppose it brings $6,000 once a year on principal. The loan would be paid off in 17 years 11 months instead of 30 years, saving about $173,949 in interest. To finish in five years, they would still need about $3,488 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
- 53. 65 and over with limited income: let a Medicare Savings Program pay the premiums
- 55. Phone or internet discount through Lifeline
- 56. Raise insurance deductibles once a reserve covers them
- 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