Strategy 33 of 107
Cut the utility bills with free weatherization and rebates
What it is
If household income is at or below 200% of the poverty guidelines, apply to your state's Weatherization Assistance Program for free insulation, sealing and repairs.
Steps
- If household income is at or below 200% of the poverty guidelines, apply to your state's Weatherization Assistance Program for free insulation, sealing and repairs.
- Anyone can use the ENERGY STAR rebate finder for utility rebates on efficient equipment when something needs replacing.
- Compare the bill before and after; send the drop to principal.
Repeat: Once for the work, then every month in savings.
Measure: Average monthly utility savings.
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
- Waiting lists for weatherization.
- Savings depend on weather and rates.
Who it fits
No high school diploma, No college degree, Grandmas and grandpas (62 and over), Average household, Single, College students
Needs
Any homeowner with a mortgage.
How predictable
Depends on people or program rules (tenants, family, IRS records, lenders)
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (no high school diploma). 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 household income is at or below 200% of the poverty guidelines, apply to your state's Weatherization Assistance Program for free insulation, sealing and repairs.
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
- Stay-put stack for 62 and over: Lower the bills and add rent while staying in the home; right-sizing is the last step, not the first.
- Bills-first stack (lowest income): No new loans and nothing to buy. Free weatherization, money already owed to you, and payments that end.
Sources and more information
- U.S. Department of Energy: How to apply for weatherization assistance energy.gov
- ENERGY STAR: Rebate finder energystar.gov
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
- 34. 62 and over: postpone the property tax and pay down the mortgage instead
- 28. Veterans: a VA streamline refinance (IRRRL) at the same payment
- 39. Active duty: the 6% SCRA cap on a pre-service mortgage, at the old payment
- 23. Re-shop homeowners insurance and send the savings to principal
- 22. Lower the escrow: appeal the property tax, claim exemptions, use the surplus refund
- 21. Drop mortgage insurance and send that amount to principal