How to Whittle Down Your Monthly Bills--and BUY Yourself some TIME!Oct 01 '08 (Updated Nov 22 '08) Write an essay on this topic.
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The Bottom Line If you're in a financial bind, some of these strategies will at least empower you to know what is possible--before the pressure's too great.
Introduction I don't need to remind you of how tough this day and age is, economically. With the recent bank failures due to the subprime mortgage crisis, and Congress seeking to bail out the perpetrators (with taxpayers' money), rather than aid the victims, people need some way to stretch their paycheck (see How to Find Deals Online...Everyday!). Here are some techniques that have aided my wife and I--particularly during this difficult past summer. Our Situation As part-time teachers, my wife and I have had somewhat precarious times getting through the summers, and, since we now have a toddler who attends private preschool-just so she can work-it has become all the more so. Recently, I was able to jump on the "resource bandwagon," pull out some stops, and reduce our obligations for 1 month by almost ONE-THOUSAND DOLLARS! This didn't involve a second job-the computer repair business didn't really pick up again until the crisis was largely over (funny how those things work out--eh?) and the unemployment claim was rejected-but just making phone calls and asking what was possible--which was shockingly revelational, in some cases. Here's my story... Ask, and you Shall Receive! How can you know what is possible, unless you ask? On several occasions, I was literally SHOCKED that my almost ludicrous requests were actually granted! I had a situation where the finance charge on a credit card took it over the limit, AND some now-forgotten scenario (it may've had to do with a 3-day weekend/bank holiday) resulted in late and other fees that were an extra $100 or so--I didn't know HOW we were going to dig out from all of that. So what did I do? I called up customer service, explained my situation, and noted that the representative sounded very "cool" and laid-back. So I jokingly said something to the effect of,"I wish we could just pretend all of this never happened." To my great surprise, the agent said,"Let me see what I can do..." I could hear him clicking away on his keyboard for several minutes, and he finally said,"OK, you just need to make your minimum payment to bring your account current." You never know what you're going to get, unless you ask. Deferments Most of you are aware that you can request deferments on your student loans. What you may not be aware of, is that you can also request deferments on virtually ANY type of loan--some of this is written into the loan papers you signed, and some may've been amended to add these provisions, as a result of policy changes, lobbying, etc., so it never hurts to ask! Deferments or forbearances are generously granted for student loans due to financial duress, being in-school, in the military, in special programs or working for certain government agencies, and (in California, at least), teachers can get up to 25% of their loan excused, for working several years in low-income school districts. The reasons may change, so it doesn't hurt to inform your creditors of your situation, and find out what is possible. And my recent forbearance application involved verifying that my loan payment was at least 20% of my income (not my wife's), and writing a short explanation, along with the last pay stub--I get considerably less in the summers, so it wasn't hard to demonstrate this. A few years ago, I was able to get a deferment on an auto loan. I called them up, explained my situation, and was told that they could slightly refinance my loan, allowing me to skip a month, and extending the term by one month--I think it added something like $15 or $20. That saved me about $300 that month. There was no effect on my credit, being a renegotiated contract, which I had to sign. Recently, I inquired about a deferment on a different auto loan. I was told that their policy prohibited it, but found that the late fee was only $15 (and the late fees on my credit cards were "negotiated" up to $39!). This was on my wife's credit, which we have not been counting on, so I elected to just be late (but I explained our situation)--we only had 2 payments left. This was a last resort, and will have some effect on her credit, but it was already "stressed," and she's never missed or been late on a payment. If you've both never had any kind of joint accounts, then it shouldn't affect the other person's credit. This is a temporary measure, though--I just created my own deferment. Informal Deferments When we recently purchased a time-share, we were told that we could call up customer service and request that they skip a month (on our automatic payment plan) if times were tough. I took advantage of that this summer, as I knew the pending charge was going to render our American Express card useless. The agent made the arrangements, and, in a moment of swallowed pride, I asked her if there was a way to reverse the last charge. Do you know what she said, to my great surprise??? "Sure, no problem!" That was a savings of nearly $400, from one telephone call in which I simply asked what was possible, and I was floored--that $400 would've been due as part of our next credit card payment, and we didn't have it. Do you think we'll be recommending this company to others? You betcha! Pay More than the Minimum! We have a personal loan with Citifinancial that we've routinely paid $5-10 more than the minimum on. I'm not sure if this is still effective as a credit-improving strategy, but my understanding is that the credit bureaus will simply report monthly payments as "above, at, or below" the minimum, and I usually try to pay at least $1 over the minimum. When I called them to inquire about a deferment recently, they said we could SKIP TWO MONTH'S PAYMENTS, because we had paid so much more than the minimum. This was a savings of about $250! Credit Card Cash Rewards Our American Express Gold Card has a great rewards program. Points are redeemable for merchandise, as well as cash cards, a statement credit, and traveler's checks. We get twice as much value when we use them for merchandise, such as from Dell.com, so I was able to avoid having to use them for this purpose--I purchase computer components that I could turn over to make a profit in my side business. However, it was a last-resort strategy, in case it was needed. Take a look at the rewards programs offered by your credit card companies--we use our American Express card as often as possible. Question Charges! Scrutinize your Statements! There were a number of instances in which strange charges appeared on my credit card statements. We started receiving "Skyguide"--a thick book with seemingly every airline itinerary possible. I have no use for this, but paid it no mind. Soon, though, there was a charge for $89 on my card. A little research showed that there had been one about 8 months prior, as well. So I called customer service, explained that I'd never asked for these services, and, after some researching of their own, removed both charges--almost $200 saved! American Express will suspend almost any charge that you bring to their attention-you don't have to pay for it until it has been resolved, and proven to be non-fraudulent. Similar things have happened with my Sprint bill--a company I have some reservations about, but am sticking with. I've called multiple times to have multimedia services removed ("Vision," with its associated charges), but yet, they would still reappear. After a while, I noticed that it'd been going on for about 10 months--I had not been closely scrutinizing my bill. When I brought this to their attention, they said they could only remove 2-3 months of the charges, without an "investigation." Naturally, I blew some fuses and took some supervisors through the ringer. They claimed not to have records of me calling and canceling services, so I now am embroiled in the project of digging through my statements to show this, which they said would result in the charges' full removal. After I had a carefully-worded heart-to-heart with a supervisor, and asked her if she thought this was "right (morally)," off the record, she almost choked up, but was silent. I just said,"I understand that you can't say." She then cheerfully said that she saw where I qualified for a $100 credit for "customer loyalty," which was immediately applied. I've also received some strange $10 charges from some 3rd parties on my Sprint bill, and I think it has to do with these unsolicited "picture mails" that I keep getting bombarded with. One that popped up was "Bid4prize." These charges were removed without question. Be careful what you're signing up for online, and what information you're giving. Sometimes, creditors will even give a courtesy reversal of legitimate fees--but only if you ask! There have been instances where I was just overwhelmed with tasks, and just completely forgot to pay a credit bill on time. I simply called them up, explained the extenuating circumstance, and, sometimes, they would reverse the fee(s). A key point is to remain calm, take responsibility for the charge, and already accept that the answer might be "no." And don't feel like a "wimp" or "softie" for asking--businesses regularly extend these courtesies to each other, and to their larger customers, which pale in comparison to the sheer volume the "rest of us" represent (just Google "bailout"). You just have to have the courage to ask! Loans on Insurance Policies Many years ago, I was able to take out a $5,000 education loan on a life insurance policy. I have not had to make any payments, other than my premium, and it would be taken out at the policy maturation date, although they've suggested that I start making some payments soon. Insurance Discounts My insurance (Farmer's) makes it abundantly clear, but my wife and I have qualified for multiple discounts on our car and apartment insurance payments. Multiple Cars, having a good driving record, passive-restraints, auto & home multiple policies, and even having a degree in a particular discipline have all added up to substantial discounts. You may have to ask your insurer to see what you qualify for. As a bonus, we pay less for the comprehensive towing coverage than we used to pay AAA, and they recently came out and charged our car battery when we overdid it at a campsite. Coupons and Other Specials These are fairly obvious, and I'll be the first to say that I absolutely LOATHE cutting coupons--but they work! It is more difficult, since grocery stores are reducing double and triple coupon programs--but it is money saved, that could go towards paying something else. For online deals, be sure and check out How to Find Computer & Electronics Deals--Every Day! Consolidation Loans and Programs There are several companies (some non-profit) that are designed to help you get out of debt, and pay down bills. I've used them, and they offer counseling, and many other services. When creditors wouldn't negotiate with me personally, they readily did through these instruments, arranging for me to avoid over-the-limit fees, and high interest rates. You could also take out a low-interest loan to pay down several obligations (but through other financial institutions, usually). Public Assistance Sometimes, you just have to swallow your pride. I couldn't believe it when my wife signed up for WIC (Women with Infants and Children), but I know several professionals (several teachers) who've taken advantage of this, and I soon got over the embarrassment--we saved an awful lot of money, and stayed very healthy, to boot! College students, especially, should apply for whatever they qualify for. Starting off on your own isn't easy! You're going to pay for someone else's benefits anyways, so why shouldn't you benefit from it? Even food stamps. Just do what you have to do, as provided by your government, while it is still available! Have a temporary lull in your work? Apply for unemployment (it's a quick process through their website (California, at least))! Getting Rid of Old Debt Sometimes offering to settle a debt for 20-50% is successful, even if a company has denied this in the past. Times rapidly change, and they may be desperate to get what they can. Just make sure you FIRST get a written agreement to remove the delinquency (if any) from your credit report, and to stipulate PAID IN FULL. Managing the Money Flow Putting everything on a spreadsheet was amazingly helpful---on one page, I could list all my resources, liabilities, calculations, and notes, and was less likely to forget things. I learned how to use one of these in high school, but this blew me away! Wordperfect Office Suite 12 can be had for as little as $3.99 (I bought 5). Write Reviews Writing Epinions reviews helps to get your thoughts out, help others, and earn some money. Sharing what you know might cause a networking mini-frenzy, and get one a more lucrative job. Referring people to my reviews netted me 5 books and a DVD, in exchange for reviews, that I would have otherwise wanted, saving me money and increasing my awareness. This was the obvious one--right? Company Discounts Some companies offer discounts for products and services, if you work for certain organizations. My wife and I recently qualified for a 15% discount on our cellular plan, due to our employer. This was despite our company not being listed on Sprint's online website--I simply dared to ask in my local Sprint store. Fifteen percent of my bill is nearly $20 a month--more than some of my credit card minimum payments, and something that could be earning interest. It's also most of the maintenance fee on my time-share. Payment Arrangements I know this is obvious, but I'm throwing it in for completeness. Sometimes you have to swallow your pride, and ask for some more time to pay commitments. Some companies, such as Southern California Edison, will let you do this via their website, or through an automatic phone system. If those arrangements aren't acceptable, then you could speak to someone. I've also made arrangements with Sprint PCS. Conclusion These are some tips that helped us through many a setback, and it's my hope that they could help you, as well. We are living in very precarious times, and most people could use a break. The key point is "you never know what you could get, unless you ask," so swallow your pride, and get on with the business of trimming down your expenses! When I save enough money, I like to do THIS. Here are a few of my fave reviews-- 3 Simple Self-Defense Moves EVERY Woman Should Know! Would You Be Afraid of A Bully Named "Cloverfield?" 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