Cutting spending is one of the first steps to taking control of your finances and getting out of debt. But there are always bills that seem necessary and we don’t really think about reducing them.
Today we’re going to talk about the 3 R’s for how to negotiate discounts on your bills. Remember that every dollar you save on your bills is a dollar that can go towards debt repayment.
You remember the 3R’s of recycling, right? Reduce, Re-use, Recycle. With bills the R’s are going to be a bit different, but the idea is the same.
Before getting to the R’s, you need to know where you stand. List all of your bills including utilities, insurance, cable, cell phones, internet, subscriptions (both physical like magazines and gym memberships, and digital like online newspapers and services like dropbox or evernote). Also include your debts.
R #1 – Remove
No sense knocking 20% off a bill when you can eliminate it entirely. Take a hard look at each bill and ask if you can live without it. Is there a free alternative you could be using? Get rid of what you can and keep track of how much you’ll save every month.
R #2 – Reduce
Now it’s time to get your hands dirty. Go through all your bills again and highlight ones where you could reasonably ask for a discount. This includes anything non-essential like cell phones, cable, gym memberships and other services, as well as anything where you could potentially go to a competitor such as with insurance and loans.
Do your research before you call. If you’re paying $60 a month for cable, find out what their competitor charges. Often just asking for a discount will work, but you have to be prepared to tell them you’re willing to leave.
With credit cards you can ask for a lower interest rate, telling them you were offered a chance to do a balance transfer to another card. Given the choice between getting a bit less in interest and none at all, they should allow you to reduce the amount you’re paying.
In general the first person you speak with won’t be able to help you. You need to speak to someone in the client retention department. These are the people who have at least some power to reduce your bill or offer additional services. Their job is to keep you happy, so tell them what they have to do to make that happen.
Remember to be polite and helpful. Coming across as a jerk who’s trying to rip them off won’t get you very far. They’re people too, and they deal with more jerks than happy people. Help their day out a bit and ask nicely for what you’d like.
R #3 – Replace
If you tell your cable provider that their competitor has a better deal and they won’t do anything for you, then exercise your right to switch and replace them as your provider. Sometimes actually asking to cancel your service will be enough to get you the discount you want, but you HAVE to be prepared to actually leave.
Do The Math
After you’ve gone through each bill, add up what you’re saving. If you’ve removed a few bills completely, reduced a couple, and replaced others with cheaper alternatives, you should have a nice chunk of money every month you didn’t before. Now use it properly and throw it down on your next debt!