Introduction:
When it comes to cutting down expenses, the first place your mind likely goes is to how much easier life would be if you didn’t have to pay bills.
Obviously, for the sake of your credit score, the bills need to be paid. However, there are some ways that you can aggressively work to lower your monthly payments—and you won’t have to cut out your beloved Starbucks. Who wants to argue with that?
Whether you’re strapped for cash or simply looking to reduce interest accumulation, the following 5 tips will help you meet your goals.
Tip #1: Shop Around
The first step toward reducing your bills is to shop around for your services. The greatest price saver is this: ditch your current grocer.
Walmart may say they will match any price you bring in, but they only say that because they know that many people will be too lazy to take advantage of their price match service. If you stand in line long enough, there comes a point where you don’t want to wait for the cashier to manually discount your Oreos by 30 cents. So, you end up paying markups, on every single item.
Looking at other local grocery stores like Aldi’s or Cox Savers is an excellent way to save hundreds of dollars on groceries every month.
Dutchess Partners recommends allocating the saved money towards savings or straight towards paying down your bills faster.
Tip #2: Ask for Discounts
Have a discussion with your internet and cable providers about discounted rates. While customer service representatives are trained to try and up sell you, there is one simple trick to get them working for you. Threaten to leave.
When you call, be cordial. Ask what kinds of discounts, deals and promotions they are running for loyal customers. Do your research and know what their competitors offer for the same and lower prices. When you compare their services, tell them what you need to be receiving for the price you are paying. If they are not willing to discuss promotions with you, tell them that you will go to their competitor instead. Very likely, you will be on the phone with a manager who is trying to convince you not to leave.
The bottom line is simple: If you don’t ask, you’ll never know.
Tip #3: Debt Stack
Debt stacking is one way to work down your debt without accumulating monthly payments. The idea is simple: your monthly payment amount remains the same, but you knock out more bills quickly, thus reducing your interest levels over time.
For example:
Bill #1 is for $1,000
Bill #2 is for $10,000
Bill #3 is for $6,000
You are making steady $500 payments to each bill a month.
After 2 monthly, you pay off Bill #1. Now, instead of saving that extra $500 a month, you stack it onto Bill #2. So now, you are paying $1,000 a month to Bill #2 and $500 a month to Bill #3.
Ultimately, you will pay down your bills faster and your interest payments will be significantly lower over time. While this does not save you money in the present, it will definitely save you big time in the future.
Tip #4: Balance Transfers
In the first year or so, many credit cards offer balance transfers at 0% APR. This is a fantastic way to swiftly reduce your monthly payments. Once you transfer your hefty bill off of a credit card which is drastically accumulating interest, you will be able to pay a steady fee at no interest and pay off your card at a much lower monthly payment.
Tip #5: Pay Upfront
Insurance companies, music subscriptions, internet contracts and phone bills alike are notorious for offering 3 different kinds of packages: the monthly package, the 6 month package, and the annual package. Each package has different price points which are often outlined at the first point of purchasing.
Whether you have been with a company for a while, or you are just starting out with them, opting for the annual—or even the 6 month package—is generally your best bet for getting the best deal. Annual packages usually allow you to pay upfront or on a monthly basis, but at a highly discounted rate.
Insurance companies are notorious for charging you extra for paying your premium on a monthly basis. A quick call to your insurance provider to pay your premium upfront could save you a couple hundred dollars a year.
Conclusion:
There are several financial techniques Dutchess Partners recommends which could help you save money on a monthly basis. Being willing to shop around and ask questions to your providers is the first place to start. Education is your best friend when it comes to learning about and applying for discounts. Debt stacking and balance transfers are an excellent way for you to reduce your overall interest payments. And of course, paying upfront where possible is an excellent way to see your bills are already paid long before they come due—and you could receive a discounted rate for being a loyal customer.