This article has been updated. You can find the current version here: How to Lower Your Bills and Save Money.
Take a Bit of Time to Save a Lot of Money
Sounds like a spam message title, doesn’t it? Well, it’s not.
Since I quit my job over ten years ago, I have earned income through a variety of self-employment opportunities but probably the most lucrative thing I have done is taking the time to ensure we are spending and saving our money wisely. It’s a new twist on Time is Money. Because I have the time, I can save or earn us money, depending on how you view it.
Step Away From The Coupons
You can clip coupons and obsess over gas prices all you want, but there’s probably some other significant savings you can also take advantage of that will save you a lot of money for years to come. The big choices obviously have the largest impact: where you live, work, play, how you do (or do not) celebrate holidays, gift-giving choices, and so on. And then there’s all the day to day stuff as well.
For starters, we track all of our spending and savings, and live within our means. Because we are self-employed, we have to be prepared for months of little or no income, either because work dries up or clients do not pay in a timely fashion. To some, it’s a life on the edge but it’s also second nature since I grew up with self-employed parents and now my siblings do the same as well. And the concept of job security with an employer is probably a thing of the past anyways. Everyone should have several month’s living expenses squirreled away, just in case. In my case, I value a sense of security much more than purchasing more stuff or taking sunny vacations. I might be more enticed if jet planes didn’t gobble up fossil fuels like Thanksgiving dinner.
The Savings Are Waiting For You
I thought I would share some things we have benefited from recently that have saved us a lot of money that perhaps some people would not think to do.
1. Each year I negotiate lower rates with our cable tv, internet provider, cell/moblie phone, and telephone land line services.
If you’re really uncertain of your finances, the first step is to consider living without some or all of these services. But for us, we can afford them and want them, but that doesn’t mean we have to pay the listed prices.
This would have never even occurred to me a few years ago, but two years ago when our rates went way up, I started googling message boards to see if these services were actually negotiable. And yes they are. While the most successful negotiating script may vary somewhat from year to year, I’ll tell you what worked for me this year.
I always phone customer retentions. These are the people you get when you tell the automated phone service that you want to ‘cancel service’. And these are the people who have the authority to give you, the customer, the best deals available to ensure you stay with them.
A few years ago it was beneficial to say you were going to switch to a competitor’s service at which point they would offer deals to get you to stay. This is not the case anymore, probably because too many people have tried playing that card (and the companies read the tip discussion boards). Now they’ll call your bluff, so I don’t even mention the concept of truly cancelling my service but instead do this:
ME: Are there any promotions available to help reduce the cost of my bill?
Short and simple. The less you say, the better. Scouring the message boards for our particular service providers informed me ahead of time what possible offers I could hope to get. The representatives do not have the authority to invent discounts for customers but they do have pre-approval to issue standard discounts. Last year I got a whopping 45% off our internet and tv cable. This year I got 20% off all three services (cable, internet, and phone).
Sometimes the promotion comes with the condition that you must agree to stay with the service provider for a fixed amount of time. For us, the cable/internet/wireless provider says we can have the discount but if we cancel within two years, we owe back all the money we saved. That’s not very nice! So make sure you ask if there are any commitment periods and decide if it suits your plans. I hate feeling locked in but I also hate overpaying for services.
Our landline provider gives a discount simply because we asked, without any obligataion. Cheers!
Check Discussion Boards First
It is truly advantageous to check discussion boards first (regarding the companies you do business with) and know what deals are possible and, if you don’t think the retentions rep is offering the best deal they are authorized to give, then just say you want to think about and try back again later (can be hours or days later). Most will keep notes at their end so when you phone in again, they’re probably aware of what you were first offered and may offer something better.
Sometimes company reps participate in the discussion boards anonymously to help point readers toward the best deals possible.
Don’t Settle If You Know They Can Do Better
When I got the 45% off (plus a bunch of nice add-ons including free two-year rental of a pvr–a Tivo-like device), I had to phone in four times before I got the great deal I knew was possible. Ironically, when I was helping family members negotiate these deals, all it took was one phone call for each of them, so, you never know!
This year I was offered the 20% off right off the bat and since no one on the discussion boards had received a better offer than that, I accepted right away. I also learned that in our case the retentions reps were more accommodating during the late shift (10 pm onward). Daytime has a higher call volume and perhaps patience is at a minimum for everyone.
What message boards you reference on will depend on where you are and what companies you deal with. And it really pays to sound naive but do your checking first. Plus, I am always courteous and supportive during the calls (after all, it probably is a somewhat hellish job). I think it’s basic practice now that the likable customer will get the bells and whistles and the overbearing complainer will pay full price.
It’s all a game, but worth it to me considering the money we have saved since I started doing this.
Mark Your Calendar For Next Year
Once you have your discounts, mark your calendar for a year from now to make sure you negotiate again before any contracts expire. If you wait until the contracts expire, you may have a few bills at full price which negates all the money you just saved.
2. Shop around for home and auto insurance every single year. But don’t switch companies too often.
I used to avoid shopping around for good insurance rates because I found it hard to understand the policies and terminology. Then one year we were given a renewal notice that skyrocketed our rates (without cause—we were claim-free and our information had not changed) and I knew it was time to stop being intimidated and get educated.
I won’t pretend it’s not time consuming to negotiate insurance rates, but the savings are always worth it. The providers obviously don’t want to make it easy to do. They earn good profits on most people not having the time or being lazy or intimidated like me.
Don’t Let The Jargon Intimidate You
The year I decided to get smarter about it, I read everything over and put the burden of understanding on them. If I didn’t know what something meant, I asked them to explain it.
Have Your Facts Ready
I have a form I use each year that lists all of our basic information that a company will ask when you are applying for home and auto insurance. Before calling, I update it with information on any new home renovations or tickets etc. This really helps speed things up on the phone and it’s crucial that your information is accurate. If you lie or accidentally provide incorrect information, they will find out eventually. I also make sure that the quotes provided break down the information line by line so I can compare it to my current policy. Cheaper isn’t better if items you consider essential are not covered.
Don’t Switch Unless It Really Makes Sense
You should also know that insurance companies don’t want you as a customer if you’re going to leave them in a year. That’s why they check how long you’ve been with your current provider. But just because you’re staying a few years doesn’t mean you can’t call in and ask if a better rate is available.
Reasons To Switch
I switch companies when the service has been obnoxious or the rates increase way beyond inflation. If there’s no real issues, I stay but still call in to review the policies to make sure there isn’t some way to reduce the cost (such as raising the deductibles).
Some years, without my consent, the insurance company has added extras to our policies that we didn’t authorize. I think it’s incredibly sneaky that you have to notice this and call in to opt out. Weasles.
Saving Money Takes Time
I count on it taking two days, full-time, once a year to get new quotes over the phone on our insurance needs. There are umbrella sites online that let you type in your details and then provide quotes from all available providers. I use those sites to get ideas about which companies might be in the running for my business and then pursue them from there.
Ask Friends How Much They Pay
Also, ask friends which companies they use and what they think about them. I especially appreciate friends who will share actually numbers with me so I know how much they are paying based on their driving records.
Is That Your Best Rate?
If you don’t do anything else, at lease call in to your current provider (about a month before your terms expire) and ask Is that your best rate? Don’t explain or give sob stories: just give the sales person a chance to do a little better. Be kind, keep your sense of humour, but stay on topic (they really do not care about your woes or your life story). I’ve found that throwing the ball back in their court always brings a better deal.
Last time I did these negotiations, I switched companies and got our rates down 35%.
It’s too complicated to get into here, but I’m sure you’re aware that the best price is not always the best deal. I also check online for recommendations, complaints, and lawsuits against the company to make sure I feel okay about becoming a customer.
3. Take advantage of credit card point systems.
The first principle of our debt-free life is to be trustworthy to yourself and others. This means, if you can’t trust yourself with a credit card, do not have one.
I never use a credit card to borrow money. I use them only as charge cards representing money we already have, paying the balance in full each month. But I do use them because I do not like to carry cash and I want the points which in our case gives cash back toward groceries. There’s lots of variations on this theme, but the grocery cash back is the best choice for us.
To further increase the points earned, I channel any monthly bills that allow credit card payment through our card as well. It doesn’t cost us any extra but brings the additional points.
Being the skeptic that I am, I didn’t even think these point systems were legit when they first came about. While I had my fabric dyeing business I had purchased all of my supplies on a business credit card that offered points but never followed up on it. You can imagine my happy delight when a store employee offered to check my points for me and advised me that I had over $850 available to apply toward grocery purchases. Sometimes a good thing is a good thing if you use it to your advantage.
Lots of shows and articles on managing money advise people to get rid of their credit and debit cards because their spending is out of control. Personally, since our spending is totally within control, I enjoy using them as tools that benefit us. The Man thinks hopes he’s hooking us in, but instead, we’re playing The Man.
4. Negotiate your mortgage (and any other loans). Even if it’s with the same company.
In short, consider any renewal notice a suggestion not a contract. Mortgage companies send routine renewal papers hoping you’ll accept the terms at face value. Forgetaboutit!
Never take a renewal notice at face value. The banks want you to think you’re getting the best rate they have to offer without them having to spend any time on you. But it’s always worth it to make the appointment, meet face to face, and see if there are any better offers available. And shop around. With interest rates so low right now, even with exit penalties it could be very worthwhile to switch to another product with a much better rate.
If you’re not good with the math and the fine print, find someone who will check it over for you. Last time we negotiated at the bank, I made the Bank Guy provide me with all numbers in writing, guaranteeing that if there were any additional costs, the bank would pay them.
It’s amazing what hidden costs suddenly surface when you start really scrutinizing things. I’m sure I drove the guy nuts with my anal approach, but I do not want any surprises. I want to know every cent exchanging hands so I can make the decision that benefits US not THEM. When we moved house, there was nearly $1000 in hidden fees that surfaced with the mortgage change and that written promise from Bank Guy enabled us to get it all refunded.
Years ago when I first started educating myself about mortgages, I clued in to the power of frequent payments and by switching our terms from monthly to biweekly payments, we shaved five years off our mortgage. We also opted to stay in our ‘starter home’ rather than ‘move up’ to a more expensive property. What the bank tells you you can afford and what is truly manageable for a comfortable life, are two very different things. Figure out what you know you can comfortably afford and don’t take on payments that leave you house poor.
Do not be intimidated. Take the time to ask questions and understand the answers. Shop around and pick something that fits within your means and how you want to live.
1. Do your research and find out what other people are paying for the same product or service. Understand that everything is negotiable. Don’t be intimidated: it’s your money and your life. Take the reigns and take control. It’s fun, I promise!
2. Have your scripts and facts and figures in front of you when you make the calls. Take notes and take your time. If the deal is legit, there should be no pressure to finalize it immediately.
3. Always check if there is a better deal available, either with the same company or another one.
4. Don’t be afraid to switch if you’re not offered a fair deal.
5. Keep it pleasant but hold your ground.
5. Let The Man work for you. Never work for The Man.
And, if you’re in a relationship where your partner is controlling all the finances, it’s time to step up and participate in the process. In Canada, 50% of women are widowed by the time they are in their 50’s. Feeling confident to control your finances and be responsible for your decisions can do a lot to ease stress, whether your partner lives to age 52 or 152. Spending blindly without a thought about what’s affordable or how you may need that money in the future is reckless and potentially lethal.
On a more cheerful note, it feels great to have The Man by tail. If it’s legal and keeps more money in your pocket, go for it!