6 Tips to Shrink Your Bills Every Year
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forestpath Everyone wants to make more money — it’s exciting to think of what you can do with some extra cash. But it’s a lot easier to reduce your bills than it is to make more money. I recently cut $120 from my monthly expenses by doing an annual bill audit, and it only took a few hours of work.
A bill audit means you commit to taking a look at your bills once a year and finding ways to maximize where your money is going.
I just finished my own audit, and here are six tips that will help make things go smoothly.
1. Schedule It
This one is crucial — you won’t get it done unless you schedule it. A one-off bill audit is great, but the real savings come from doing this every year. Set an annual reminder in your calendar program of choice, and then get to work.
If you have a day or time of the year that you sit down and do “paperwork,” then add this to the list. Tax time is a good way to remember since you’re looking at all the money you’ve made. (See also: 5 Things Tax Preparers Should Tell You)
2. Itemize
Take a close look at your bills. Don’t just write down the amount you’re paying every month — that’s useless. You need to know what’s inside that bill.
- How much is your cable-box rental costing you? What about HBO?
- How much is texting costing you? What about overages?
- Are you paying for insurance coverage you don’t need anymore?
I found out I could cut roadside assistance because I have AAA now. The point is to look at the details so you can determine if you need every specific line item. Odds are you’ll find something in there you can chuck.
3. Figure Out Your History
How much have you used the stuff you just itemized? Take a look at the past three months (you can find all this online, more likely than not) or so to see what your usage looks like.
How many Netflix movies did you really watch? How many minutes did you use up on your cell phone? Texts? What about data?
Put all this stuff into a spreadsheet and then look and see if there is a cheaper plan you can sign up for that better suits your actual needs, not what you think you need.
Be careful, though — you don’t want to sign up for a lesser plan only to get dinged with overage charges down the line. Pick one that covers you in case your usage bumps up a little.
4. Get Quotes
Thanks to the Internet, this is easy. Insurance companies will let you create and save quotes in minutes. For cell phones, cable, and Internet plans, just browse the different sites, and you should be able to get an idea of what it will cost you to change your plan.
You might be eligible for extra savings if you actually call, so keep that in mind too.
5. Read the Fine Print
If a deal looks too good to be true, it probably is. Make sure you read all the fine print. I switched to a crazy-cheap T-Mobile plan, but it's crazy cheap because they won’t give me any discounts on new phones. I’m OK with that, but some people won’t be.
Know exactly what you’re getting into before you make the jump.
6. Call
I hate talking on the phone, but sometimes this is only way to get certain deals. It’s also a great way to get all your questions answered. I switched my cell phone plan on the phone and at the end of the switch, the customer service representative offered to take an extra $10 off my monthly bill to try some new service they were offering.
After finding out the exact details (read the fine print!), I signed up and set a reminder to kill the plan in two years so I don’t get charged. Calling is how I found out about the insurance coverage I no longer needed. I hate calling, but I like saving more.
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I've never actually sat down to do an annual audit, but I look at my finances on a weekly basis. It does make sense to sit down once a year to check for better deals on car and health insurance. I'm scheduling this today!
I knocked 15% off my cable bill for a year by talking to customer retention and saying I wanted to cancel because it wasn't worth the money. It's not exactly something I'd mark in my calendar every year but I do know some people who call on a somewhat regular schedule to take advantage of customer retention discounts.
I've done this before when a promotional term expires, but I don't have the guts to bluff and say I'm quitting entirely. I've called to say I want to know what it would cost to cut the cable portion and keep the Internet because I'm thinking about leaving cable. And that has worked for me.
I just recently called AT&T about my internet service. I had a rate of $20/month and it shot up to $40/month. I called and got them to bring it down to $25/month. I can't even imagine what my bills would be if I didn't call at least once a year to get the best rate.
Doing this type of audit every year is VERY worthwhile! I do this not only for my personal bills, but for my business too. Pennies add into dollars quickly. Not to mention I would rather have the money in my pocket instead of "giving" it away to someone else, especially if I'm really not using it or not getting my moneys worth out of it. Thanks for the great post and tips.
this reminds me, i need to call the cable company and change my plan.
Love the tips. It seems like its always just a matter of sitting down and bearing the customer service calls you're going to have to make. Cable/Internet is always the easiest to shrink, and to get free bonuses from :).
This is a fantastic idea. I do up a budget and am very organized about tracking my expenses but somehow I still end up spending more than I budgeted every month.
I suspect its a combination of impulse buying and surprise bills/fixes, but I've never really bothered to sit and work through my history! Perhaps because looking at money going out of your bank account is a stressful experience. But slowly I am starting to realize these are the necessary, grown-up things you need to do to have a better life.
I am So doing a Bill Audit this Friday.
Thanks!
Eesha
YNAB software is amazing.
This article was great!! It definitely is an eye opener. My parents instilled in me that when you are purchasing items to read the fine print. The fine print is usually what gets people because the majority do not read it. Why? Well, it’s tiny and no one wants to read it. If everyone were to read the fine print, people would be in a better state with their finances and decision making.