Have you lowered your bills recently?

Ask graffitiPhoto courtesy of Vlastimil Koutecký

This week, I managed to lower my phone bill by over 25%.

It was easy, and didn’t even require a call into the (dreaded) customer service.

But there’s nothing special about me and my situation, and you can do the same thing, regardless of what bill you’re dealing with.

How to have more money

There are only a few ways you can have more money:

  • Increase your income (I)
  • Lower your bills (B)
  • Decrease your expenses (E)

(Don’t forget, here’s the glossary.)

Each of these are possible, but some are easier than others. For me personally, increasing income is a mystery to me. There are plenty of sites out there to help with increasing your income (some of them legitimate), but this is not one of them.

Expenses are much easier for me to talk about minimizing. I’ve talked about this a lot, but in short, tracking and getting on a plan is the quickest way to feel like you’ve gotten a raise. (That, or pay cash for everything.)

But what about your bills?

Check your bills

Many people think that their bills are inviolate. They are what they are, and they will always be that way.

But that’s simply not true. Rates change often as the marketplace evolves, and this is especially true in competitive situations. Basic laws of the market say that where there is competition, there is often opportunity to lower your costs.

Take the lowly phone bill. Phone companies are desperate to keep your business. That why they came up with contracts and early termination fees (to keep you) and willingness to pay other companies’ early termination fees (to steal you.)

T-Mobile switch ad

Slick.

How I lowered my phone bill on my lunch break

I signed up for my current plan about a year or so ago. While there were many options available to me, both contract and non-contract, this option, hidden at the bottom of a tree of pages (and clearly designed not to be found), was this:

T-Mobile old plan

Sold, for $35.

Unlimited talk and text is exactly what I wanted. I don’t need data, as I don’t use a smartphone. But I do talk on the phone and text frequently. So it was a sweet deal for me.

Now, $35 may not seem like a lot of money, and I don’t feel like it is, but I’m always on the lookout for better deals.

So periodically, I go on to the exact same page on T-Mobile’s site, just to see if anything has changed. Sometimes, when things change, prices go up. But not always.

So imagine my surprise when I saw this online.

T-Mobile new plan

Why sure, I’ll take $25 over $35.

Wow, let’s hear it for competition. Also, let’s hear it for a company that really doesn’t cater to people like me. They can save their crazy prices for those who want the latest in 7G+ LTDMA GB internet on their phone. Meanwhile, I’ll be fine paying 2-4 times less than everyone else.

So the next day I walked into my local T-Mobile store and verified that this was indeed not a misprint, and got signed up in less then 10 minutes.

Now, even though $10 isn’t a lot of money, it represents a savings of $120 per year. Could you use an extra $120 this year? I thought so.

How to lower your bills

Getting your bills lowered can actually be an easy process, and it doesn’t take much effort.

  • If your bill has its prices listed online, you can always check the site periodically to see if it’s been updated. Or, to be super slick, you can use a site like ChangeDetection which will monitor certain websites and alert you when they change.
  • If your bill doesn’t have prices listed transparently, you can always call and ask if you can get a lower price.

To that last point, it falls under one of the most powerful advice headings for getting what you want: It never hurts to ask. Back when I was in New York City and had an account with Verizon, I used to call them up maybe once every six months to a year and ask if there was any way to get a lower rate. And almost without exception, every time I called I was able to get something out of it.

If you wanted to systematize things, I would stick to a rough six month timeline. Every six months, go through all of your bills and find out if a lower rate is possible. Keep track of useful customer service numbers to make it more efficient. You’ll know very quickly if you’re going to get anywhere or not. But if an hour’s worth of phone calls saves you $10 a month, is that worth it? I’d say it is.

Not all bills are worth reducing

Now, be careful, because not every rate reduction is a good deal.

If you have a loan or a credit card, then getting a reduction in your monthly bill is not a good plan. Unlike a stateless bill like phone or electric (meaning what happens this month doesn’t affect next month), a loan payback rate modification has long-range consequences.

For example, say you had a $10,000 loan at 10% interest, and you had to pay it back within 5 years. In this case, your bill would be around $212 per month, and by the time you were done, you will have paid around $12,700.

But if you managed to get a rate reduction to $166 per month (extending the plan to 7 years), you would save almost $50 each month, which is great, but by the time you were done you would have paid around $13,900, an extra $1,200.

I don’t want you to pay extra if you don’t have to, so avoid changing these types of bills unless you absolutely have to. (If anything, these are the bills you want to pay more on.)

Remember, your bills can be adjusted just like anything else. Sometimes, all you have to do is ask.

But enough about me. How do you reduce your bills?

Mike Pumphrey

Mike Pumphrey

I'm the founder and author of Unlikely Radical, a site to help people succeed with money, achieve their goals, and live intentionally.

I offer a free phone consultation to anyone who is interested in changing their financial narrative. Are you ready? Click here for details.
Mike Pumphrey
Posted on August 1, 2016