Rent, mortgage payments, utility bills and other monthly expenses add up fast — and I’m always thinking about ways that I can cut back on what I’m spending without having to compromise on what I want and need in my life.
I’ve learned that the good news is many of those monthly bills are negotiable, which means you can cut back on what you’re paying each month by leveraging a simple and powerful tactic: negotiation.
If you’re willing to make a single phone call, you could put thousands back in your pocket annually. I’ve personally saved money on car insurance, internet and utilities by calling the company and negotiating for better rates.
If you’re ready to do the same, use these tips to cut back where you can and make sure you get the best rates so you can save now and in the future.
1. Cable and satellite TV services
Cable and satellite TV providers regularly add new fees and raise monthly rates. I’ve also signed up with a rate that, after 12 months, is no longer being offered, so all of a sudden my bill skyrockets.
This is why it’s critical to research the most competitive rates in the area and then call—so you can leverage your research to get the best deal. Conversely, consider cutting the cable cord altogether. According to The Simple Dollar, “a typical cord-cutter could save up to $1,236 a year.”
Money-Saving Tip: Experts at Business Insider say that successful negotiation is all about getting the customer service representative on your team. When calling, say things like “I’ve always been a fan of your business, and I’d love to continue being a loyal, valued customer. What can you do to help me?” Not a loyal customer? Switch things around with phrasing like, “I’d really love for you to earn my business today.”
2. Health insurance
Have you heard your wealth is connected to your health? This phrase is true for many reasons, including how much we often spend on health insurance. According to the 2019 health insurance survey from HealthMarkets, 86.1 percent of those insured with Medicare and Medicaid pay under $251 out of pocket monthly, while 46.4 percent of those with employer-provided insurance pay between $251 to $1,000 each month.
Money-Saving Tip: Healthcare.gov suggests you may be able to lower your payment by reducing your monthly premium based on income. Thus, “if your income changes, or if you add or lose members of your household, your premium tax credit will probably change too.
It’s very important to report income and household changes to the Marketplace as soon as possible.”
3. Cell phone bill
Did you know the average cell phone users wastes $198.68 on unused data each year? If you’re not using all your data—or have an outdated plan—you may be paying for more than you need, and wasting money in the process. While switching carriers is one way I’ve saved money on my cell phone plan, negotiating can be just as effective and it’s easier than switching to a new company too.
Money-Saving Tip: MoneyCrashers experts explain that honesty is the best policy when calling your cell phone provider. Explain to your provider that the fees on the account are too high and you’re considering going to a competitor for a better rate. You should then be redirected to the ‘retentions’ department, who offer competitive deals to keep customers. Chances are, you’ll be put through to a supervisor who can authorize a better rate.
4. Car insurance
Car insurance is a necessary monthly expense, but it doesn’t have to be as expensive. While the average insurance costs fluctuate from state to state, there’s plenty of opportunity for reducing your rate based on your provider. For example, you can reduce your rate after a certain amount of time has elapsed after getting a ticket.
Money-Saving Tip: “You’re in the strongest position [to negotiate] when your policy is coming up for renewal,” suggest experts at CompareTheMarket. “Often, some of the best deals will be available three weeks before your renewal, so this is also the best time to shop around.”
5. Credit card bills
Credit card bills can be difficult to pay off, especially if you have debt on a card with a high annual percentage rate. Plus, this is where much of your monthly expenses come from, so tackling that percentage rate is key to reducing your monthly bill.
Money-Saving Tip: Experian’s advisers suggest asking for a temporary rate reduction if the company is not willing to offer a lower rate indefinitely. If you have debt on multiple cards, start with the oldest card. Don’t forget to always pay your bills on time; this will give you leverage when calling. Most importantly, don’t be afraid to try again and call in three to six months’ time.
6. Internet services
The internet can be expensive — but we all need it. So, before calling to reduce your internet bill, be realistic about the services that you’re paying for versus the services that you’re using and consider the benefits of bundling those services together with your cable or cell phone bill. Many cell phone companies also provide home internet, so you may be able to get a better deal simply by switching your Internet provider, something I’ve done in the past myself.
Money-Saving Tip: “Be careful about threatening to cancel,” suggests bill negotiation experts at WealthFit. “Often, that is an excellent strategy for having your call escalated to a supervisor who has the authority to slash your bill to keep you. But if all the company does is give you a set of steps to take to cancel your account, make sure you have a backup plan.”
7. Utility bills
Most of the money we spend goes toward where we live. The good news is, for personal finance expert Jim Wang, one rule reigns supreme: if something has a contract, it’s negotiable, and that includes your electricity bills. In a recent article for WalletHacks, Wang details his own electricity blunder and said: “You’re supposed to call in after the lock-in period ends to renegotiate your deal. You don’t just let it float and expect to be charged market rates.” So get your timing right on this one.
Money-Saving Tip: Wang recommends setting reminders on your calendar each time you sign up for a contract, adding the end date of the contract so you won’t forget it.
While Mortgage Reports says the average mortgage payment is declining, your mortgage is still likely one of your highest monthly bills. Thankfully, there are ways to take advantage of lower mortgage rates without having to refinance into a new home loan.
Money-Saving Tip: The key to negotiating a loan modification is evidence. The mortgage experts at HSH recommend explaining your need for a modification in writing and providing documentation that explains your income and other assets.
Pick up the phone to save money
A simple phone call could reduce your monthly expenses by hundreds of dollars. Don’t miss this opportunity to spend less, save more, and still have what you need to stay safe, healthy, entertained, and connected.
Jessica Thiefels is the author of 10 Questions That Answer Life’s Biggest Questions and host of Mindset Reset Radio, a personal development podcast. She’s been writing for more than 10 years and has more than 800+ published articles worldwide. She’s written for AARP, Reader’s Digest and Lifehack and regularly contributes to Fast Company, Glassdoor and more. Follow her on Instagram and Twitter.