6 Tips to Shrink Your Bills Every Year
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)
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.
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.