Jan 21 2008

Better Budget Challenge # 3: That’s too much!

NOTE: Because I want y’all to participate, I’m going to put this post up high on my site for awhile. Scroll down for more recent posts, please. 

I am so excited about this week’s Better Budget Challenge! Now that we’ve considered our budgeting needs and talked about how we budget, we’re going to start cutting our expenses.thatstoomuch.jpg

Just like in the Price is Right game, “That’s too much!” we will look at our bills and shout that phrase. Sort of.

This week, we’ll focus on saving money on our fixed bills.

There are two main strategies you can employ:

  1. Eliminate or cut back on services
  2. Ask for a better rate on what you already have

Keep each of these in mind for this week’s challenge. First, make a list of all of your fixed monthly expenses. I’ve listed a few below, but if you know of any more to add, please let me know.

Now, roll up your sleeves and get to work.

Call these companies, explain you’re a loyal customer (or are receiving better offers from other companies, or…), and ask for a better rate.

Depending on the competition where you live, you could be getting a considerably better deal. If nothing else, you’ll be reassured that you’re spending the least you can (while still getting that service).

If the company can’t lower your bill, ask them if there are any perks they can add at no additional cost.

Maybe the cable company can’t lower your bill, but maybe they can add more channels for free, or for an extra $1 a month, for example.

If you’ve been considering dropping a bill entirely, why not do it now? Get rid of that unused Netflix subscription or cancel an unread magazine.


Possible bills and monthly expenses that can be lowered:

  • Credit card interestcredit-cards_web.jpg rates
  • This article on Bankrate shows that more than half the people who ask for lower interest rates will get them. The article suggests you say this:
  • “Hi, my name is [Your Name]. I am a good customer, but I have received several offers in the mail from other credit card companies with lower APRs. I want a lower rate on my card, or I will cancel my card and switch companies.
  • What do you have to lose? If you get a “no,” try again in the future. Even if you don’t carry a monthly balance or use a particular credit card, call and ask for a better rate anyway. I don’t see how that could hurt your credit score, and it could help.
  • A word of caution: If you don’t have the money to pay off your credit card every month, be sure that they are only lowering your interest rate, and not delaying your next month’s payment or something fancy. That could cause you to be spending more on interest.
  • Phone plan (landline)
  • Are you paying too much on a landline? Do you even need one? Look at some of your recent phone bills. Do you need call-waiting or voicemail? If people can’t get through on your landline, perhaps they can call your mobile. Do you need long distance on your landline? Maybe you could use a calling card or your mobile instead. Eliminate all unnecessary features.
  • Cell phone
  • If you’re going over your monthly minutes allotment, by all means, add more big-cell-phone.jpgminutes to your plan! This is almost certainly cheaper than paying ridiculous overage fees. Or, cut back your cell phone usage. Make more calls from a landline. Do you have a texting plan that you don’t use? Maybe a pay-per-text plan is more appropriate for your needs.
  • You might be eligible for discounts. Call and find out. I have a 12 percent discount off my monthly plan because when I signed up, I was affiliated with a university.
  • Cable/satellite TV
  • What’s your cable plan? If you have an extended plan, do you actually watch those channels? If you only channel surf through them, why not eliminate them from your plan? If you miss them this month, you can always add them back next month.
  • Are you getting the best rate on your plan? Even if you’ve been with the company for years, ask if you can have a promotional rate. Explain that you want to remain a loyal customer, but are trying to cut costs. See if they can offer you a better deal.
  • Internet
  • Be sure you’re not overpaying here. Some companies offer “bundle” packages, so you could pay $99 for your internet, cable and phone. If you’re paying more for those, perhaps you can get a better deal.
  • Shop for other deals in your area. If you don’t want to switch companies, call your internet company and say “I found this deal with X company. Can you offer me a better deal?”
  • Car insurance

burnt-out-car_web.jpg

  • At least every six months, shop for a better deal. Consider having your renter’s or homeowner’s insurance policies with the same company to possibly get a better rate.
  • Remember, for every six months that goes by, you are older and perhaps your car is older, too. It could be six more months you’ve been ticket-free and accident-free. Use this to your advantage.
  • Newspaper subscription
  • As an old newspaper gal, I can tell you that most newspapers are fighting to keep their subscribers. Subscriptions help keep the newspaper’s ad rates high. A good newspaper will work to keep you happy. Ask what they can offer you to keep you as a subscriber.
  • Magazine subscriptions
  • If magazines are accumulating on your coffee table and you’re not reading them…cancel them!
  • For many magazines, you can have a yearly subscription for $5 or less. Search online.
  • If you are regularly buying a magazine at a bookstore or supermarket, subscribe!
  • Netflix or Blockbuster subscriptions
  • Blockbuster and Netflix are essentially the same type of company, and they really want your business. Are you getting your money’s worth? If not, consider lowering your plan.
  • Call and ask what they can offer you to keep you as a customer. Maybe they have unpublished lower rates or can give you more DVDs for the same price. You won’t know until you call!
  • Right now, some Blockbuster plans are cheaper than similar Netflix plans. See if you can use this as a bargaining tool, or switch companies. Remember that if you’re signing up for either company for the first time, you’ll have a free trial period.
  • exercise-web.jpgGym membership
  • Perhaps you’re tied in to a contract. There might not be wiggle room until your contract is up (but still, maybe you can try!).
  • Here’s an article on how someone lowered their gym membership by $40 per month.
  • Never agree to the first price they quote. Ask if they can do better. Maybe they can throw on optional services at no additional charge, a personal trainer at no extra charge, or a steeper discount if you add your husband or wife.
  • Say you’re considering not renewing your membership and see what they can offer you to keep you as a customer.
  • Bottom line, they can probably do better than the lowest advertised price. See how low they can go.
  • Bank accounts
  • Have you evaluated your personal banking needs lately? Have you looked into banking somewhere else to get a higher interest rate on your savings and checking accounts?
  • Are you paying fees to maintain your checking account? Don’t! There’s free checking out there.
  • Call your bank and find out what your interest rates are, if there are any debit card incentive programs you can join, or any types of accounts that would work better for you.
  • Consider switching to a credit union or online bank to get the best possible rates. Sure, it’s a hassle to change banks, but it’s your money–make it work for you.

Whew! That’s a long list! Now, on to the challenge:

  1. Choose at least one part of your fixed budget (it doesn’t have to be on this list) that you will try to lower. The more areas you tackle, the more money you can potentially save.
  2. Use your awesome negotiation skills, get on the phone and ask for a better deal! If you’re worried about spending all day on the phone, remember you can multi-task. While on hold, you can get things done at your computer, or clean something.
  3. Blog about the great deal(s) you got. We’ll all be encouraged and inspired by your efforts, and get ideas for how to negotiate our own deals. If it didn’t work, let us know, too. At least you tried!
  4. If you’ve recently written about reducing a bill by asking for a better deal, by all means include your link below.
  5. Please link back to this post so others can find people participating in this challenge.

I’ll write a round-up post of participants this Friday.

Estimated time of this challenge: 5 minutes or more, depending on how long you’re on hold.

Estimated effort level: Low. Just get on the phone!

Estimated benefit: High – You could instantly start saving money. Or, you’ll find out that you’re paying the lowest rate you can. Also, you’ll be helping other frugal bloggers find out how they can save money.

Post the direct link to your post in the Mister Linky below. I’ll have to delete posts that link to your homepage–we’ve got to be able to find your direct post, ya know?

Thanks for participating! Have fun and good luck!



13 Responses to “Better Budget Challenge # 3: That’s too much!”

  1. I love your blog. I hope you don’t mind, I added you to my blogroll!

  2. Count me in!!!

  3. This is a great challenge!
    I do this twice a year and it can save you a ton of money.
    You just need to ask and so many companies are willing to work with you on these things that it can be very easy.

    Take Care

    LJ

  4. Great Challenge!

    Today’s results were relatively weak compared to my past attempts. Apparently, the credit card companies seem to be much more willing to work with people that owe them money as opposed to those whom the CC companies owe money.

    A

  5. I really like this post, especially the up-to-date cell phone picture you use! When it comes to car insurance, people should consider whether they would be better off switching to liability only when their car depreciates to a certain value. I’m trying to decide when in my car’s lifespan I will get rid of the full coverage and save about $50-75 a month. It’s still worth $6-7,000, so I’m definitely not doing it yet, but several years and many more miles down the road, I will make the switch.

  6. Lol yeah, I love the Zack Morris-style phone.

    That’s a really good idea for a post, Blake, about when to switch to liability only insurance. Maybe you should write about it.

    @A–you put in a good effort! Some times, places won’t budge. Won’t know until ya try.

  7. We’re in the process of seeing if we can get a better car insurance rate. I’ve been meaning to do it for awhile (seeing as our current insurance expires in a few weeks) but this gave me the extra push I needed to get started on it now! My husband called our agent today with some quotes I’d gotten earlier in the week from other companies, so we’ll see what happens.

  8. Here is mine:
    http://heartyworks.blogspot.com/2008/01/thats-too-much.html

    Better late than never, right?! :D I am now saving $120 a YEAR on my land line!!! :) THANK YOU FOR THIS CHALLENGE!!!!!

  9. I got tired of paying 14.95% on my VISA and they wouldn’t drop the rate, so I called my MasterCard issuer and asked them for a deal. They offered me 3.9% for 9 months or 6.4% for the life of the transfered balance. I took the 6.4% and transfered all but $100 from the VISA and my monthly payments have dropped by a good 25%. Interest rates do count!

    As for insurance, once your car’s replacement value gets below the yearly cost of the “collision and comprehensive” part of your insurance premiums, drop that insurance. But never cut your liability too low. Some people buy the minimum liability their state requires, often $50,000, but that’s not nearly enough. Get sued for $500,000,say, and if you have at least a few hundred thousand in liability coverage, your insurance company will fight to get an out-of-court settlement for less than your coverage. But with a small amount of coverage, they may just hand you a check and say “Adios!” leaving you to hire your own lawyer, fight your own court battle and pay any damages awarded the person suing you yourself….which you could be doing for the rest of your life!

  1. 4 Trackback(s)

  2. I said, “That’s too much!” | Sense to Save
  3. dear isobel money » Better Budget - Week 3, Part 2
  4. Better Budget #3 roundup: It was just too much! | Sense to Save
  5. Better Budget Challenge #3 |

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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