This post comes from Camilla Cheung at partner blog Wise Bread.
Bills! Bills! Bills! Sometimes it seems as if everyone's got fingers in the pie when it comes to your hard-earned money. Electric bills, water bills, cable bills, cellphone bills, doctor's visits -- the cost-of-living expenses never seem to end.
However, if you're smart about it, you can work the system and save some money on these so-called necessary expenses. (See also: "6 tips to shrink your bills every year.")
1. Cellphone plans. Do you really need that $80-a-month smartphone plan with unlimited data? Unless you work in social media or your smartphone is essential for your job -- in which case, consider asking your company to provide a cellphone plan, or look into writing it off on your taxes if you're self-employed -- most people don't need a smartphone.
I've lost track of the number of people I've heard complaining about the abysmal state of their finances and all the debt they have, and yet they are still paying for two iPhone plans per household. What if you saved yourself $40 a month and put that money toward paying down your debt? Consider a far less expensive family plan where calls between family phones are free. You may even be able to share with family members even if you don't live in the same household. (Do you have too much debt?)
2. Internet. If the extent of your Internet usage is surfing the Web, streaming Netflix movies and sending emails, do you really need super-high-speed Internet? Your Internet service provider might have a lower-speed plan that is sufficient for your needs but may save you $20 a month or more. Even one of the slower Internet speeds may be more than enough to stream movies and music.
By the way, if you are getting an introductory deal on your Internet that is expiring, call your provider and suggest (politely) that you may want to cancel your service unless it can offer you a better price. It might extend the deal for you or slash a few bucks off your monthly bill.
3. Land-line phones. If you have a good cellphone plan, consider canceling your land-line service. Alternatively, look into one of the Internet-based phone systems like Ooma, Vonage or MagicJack. These VoIP phone systems feel just like land-line, have 911 support, offer inexpensive long-distance calls and often cost just a few bucks a month (though there may be an upfront cost for the hardware).
Personally, I use Google Voice, which is free (but doesn't offer 911 support), which I have connected via my router to a phone in my home. It works just like a land line and doesn't cost a penny.
4. Cable TV. I don't have cable TV, and I don't miss it. I can stream almost everything I want to watch through websites like Hulu and Netflix, from sports to my favorite TV shows. If you must have TV, consider switching to basic cable and bundling your TV service with your Internet and phone services for a better deal. Post continues below.
5. Energy bills. You can obtain significant savings in your energy bills by being more energy-efficient in your home. Insulate your water heater, and turn down the house thermostat by a couple of degrees. Do laundry using cold water -- your clothes will last longer, and you'll save energy. If you're buying a new appliance, look for the Energy Star logo, and see if you can get a rebate from your local water or electric company for getting a more efficient appliance. Oh, and your city may even pay you to let it cart away your old cruddy fridge, too (or you could sell it on Craigslist).
6. Doctor's bills. If you have health insurance and you receive a bill from a medical provider, don't just blindly send a check. The provider may have neglected to bill your insurance or sent you a bill "by accident." For instance, I received a bill from the California Prenatal Screening Program -- they assumed I didn't have health insurance until I provided proof, even though I was tested through my doctor's office (which has my insurance information). Be sure you know how much your co-pays should be according to your insurance plan, and when in doubt, call to clear up any misunderstanding.
By the way, going to your routine checkups at your doctor or dentist is an important way to maintain your health and avoid bigger expenses in the long run. You don't want an unfilled cavity to turn into a root canal, which means more pain and more money.
7. Coffee. If you spend $3.50 on a latte every day, that adds up to $1,277.50 a year. At those prices, you could have an espresso machine at home and still save money. Save the coffee shop for special occasions, or limit yourself to once a week. Meanwhile, invest in a good-quality coffee maker at home for your morning java fix.
8. Groceries. The grocery bill is a significant chunk of your spending every month. I'll be the first to admit that I am not as diligent at finding bargains as I'd like. This year, my resolution is to clip coupons, look for deals and shrink my grocery budget by 20%. My first step is to create a coupon folder in which to store coupons so I can find them when I need them.
There are other things you can try too. Buy less meat and eat more vegetables; both your body and your wallet will thank you. Try growing, canning and pickling your own produce. Cook from scratch instead of buying preseasoned or prepackaged foods. Buy generic brands.
9. Household necessities. Almost anything can be cleaned up with baking soda or vinegar, which are cheap and natural alternatives to pricier commercial cleaners. Good for tasks like scrubbing baked-on food off dishes, cleaning the oven, washing windows, fending off ants, cleaning silver and brightening laundry, these two basics will have you pretty much set. As for other household necessities such as paper towels, over-the-counter medicines, trash bags and toilet paper, opt for the generic brand and/or buy in bulk.
10. Credit cards. Not everyone can handle having a credit card. If you can, be sure to pay off your balance every month to avoid being charged interest. If you're the forgetful type, consider setting up automatic payments through your bank (just be sure you have enough money in your account to pay your bill, or you'll be charged by your bank too).
Don't get a credit card that you have to pay a yearly premium for. There are lots of free options that offer cash back, points or other bonuses. By the way, if your credit card offers cash back, you may have to claim your cash-back bonus in the mail. Be sure to do that to avoid losing the money you've earned. If you can handle the temptation of having that plastic card in your pocket, credit cards can work in your favor and actually earn you money.
In general, setting up automatic payments for all of your bills is a good idea, as long as you're sure you'll have the money in your account. You'll save on postage and avoid late fees if you forget to pay a bill. Also, some of your bills may be payable by credit card. If you pay your bills by credit card and set your card to be paid off in full automatically, you can earn cash back on your bills too.
How do you keep your expenses down every month?
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