Pending payments, accrued late fees and power cut-offs, it’s no news that energy bills debt has risen in households across America. With over 20 million households falling behind on energy bills, many have been forced into power cut-offs due to unpaid bills. Since the electricity prices surge in 2021, homeowners need help finding a way out. Cheaper tariffs, and energy efficiency, have certainly helped, but what about the pending bills? This immense financial burden requires a much more hands-on approach, which is where this piece comes in. There are ways to deal with the piling energy bill debt and get back on track financially, and it starts with these seven quick steps.
1. Understand Your Rights
The first step is to understand your rights as a consumer. Numerous online resources explain your protections against energy companies and how you can use them in your favour. Staying informed about changes in the marketplace related to energy bills is critical to take advantage of lower rates when possible and avoid being hit with unexpected increases due to market fluctuations or other factors out of your control. By doing this, you’ll be better informed of what options are available to you when dealing with rising energy bills and debt.
2. Look At Your Income And Spending
Next is to take a look at your income and spending. How much are you bringing in monthly? Create a budget with the YNAB app that considers your monthly expenses, including energy bills. Additionally, monitor your spending habits and examine where you can cut back. The extra money you can gather can be used to pay off your energy bills and manage high debt levels over time so that further financial problems don’t arise.
3. Prioritize Payments
Most people fail when tackling payment not because they lack the finances but because their payment strategy needs to be revised. Prioritize your payments: starting with the most urgent debts, such as any overdue bills or those with the highest interest rate. Paying off small debts can also help improve your credit score over time.
4. Check Your Benefits
Government benefits such as the Low Income Home Energy Assistance Program (LIHEAP) can assist with paying energy bills. Depending on your circumstances, you could be eligible for grants or other forms of financial aid to help reduce the cost of your utility bills.
5. Negotiate With Your Utility Company
Try negotiating payment plans with your utility company to make manageable payments on outstanding balances. It could involve setting up a repayment plan or using reduced rates for specific services if available from your provider. It’s important to remember that many utility companies offer discounts or hardship policies for those struggling financially due to unexpected circumstances such as job loss or illness, so ask about these options if they apply to your situation.
6. Consider Other Financial Options
If negotiations don’t work out, consider other financial options, such as a personal loan or line of credit from a bank or credit union that may have more favourable terms than the ones offered by utility companies directly (such as lower interest rates). Additionally, if you have access to family members willing and able to help cover some of the costs associated with rising energy bills and debt, this could be another option worth exploring, depending on the situation.
7. Seek Professional Help
None of these options proves viable solutions for you? It might be wise to seek professional assistance from organizations like The National Foundation for Credit Counseling (NFCC), which provides free advice and guidance regarding debt management and budgeting strategies that could help alleviate some of the stress associated with dealing with high energy bills debt in particular or various other types of debt more generally speaking.
Last Word
Dealing with rising energy bills debt can be overwhelming, but there are steps you can take towards reducing it gradually over time. From understanding your rights as a consumer, negotiating payment plans, seeking professional help, utilizing other financial options, and staying informed & monitoring spending habits – these seven pointers will give you an excellent starting point in tackling high energy bill debts head-on. With dedication and patience, anyone struggling with increasing energy costs can find relief through these helpful tips.