Before you start working on your actual budget I encourage you to do two things. 1) Take a look at your “fixed expenses” really closely. Some of these are actually quite flexible and you may be able to get these prices down and free up some money in your budget. 2) Take a look at any category that kind of took your breath away. For example, everytime I look at my family’s numbers I think to myself “Are we REALLY spending that much on transportation a month?” (Between car/truck payments, insurance & gas we spend about $1100/month on our vehicles….this is a bit insane!). Find ways to save money right off the top. Today I am just going to write about number one.
Look at “Fixed Expenses”
The Cell Phone Bill
Since signing your cell phone contract have you gone back to talk to them about new plans that have come out? Husband and I have our cell phones currently through Rogers. Once a year or so we go to Rogers to talk to them about our plan and get our costs down or at least our benefits up. Essentially, we approach the sales consultant (or whatever their official title is) and say that we are looking to cut costs on our cell phones and although we are happy to stay with Rogers we will pay to break the plan and move somewhere else if it is beneficial. (In all honesty, we are lazy and like our cell phone numbers and probably won’t switch providers but they don’t need to know that). Think about this situation from a buisness perspective, Rogers doesn’t want to lose our buisness. We have a great payment history with them, we are gaurenteed income. Rogers also wants to stay competitive to the outside market, always trying to bring in new customers. When you add these two things together, you will learn that Rogers is continually bringing out new plans to entice new customers…and exsisting customers can tap into these plans with no pentality. For example, last time we went in, which was just a couple months ago, we were able to decrease the amount of money we were spending each month on cell phones by about $20 (or $240 a year or $720 over the course of the 3 year contract). What’s better is that we are getting MORE for the money. We over doubled our data and now have unlimitied calling between the two of us (even if we are apart…if I’m in British Columbia and he’s in Alberta we can still call each other for free), then unlimitied evening weekend and substantially more daytime hours. Essentially we saved ourselves money and doubled all of our benefits. We did not sign a new contract. The end date is still the end date. The catch is you need to make time to see what your options are and be dilligent about cutting costs.
Cable/Internet/Home Phone/ etc.
Guess what? This works EXACTLY the same way. After an awful experience with Shaw that literally had me in tears of pure frustration, husband and I decided to call Telus and see what they had to offer. Turns out Telus was cheaper (by about $40/month) and we have been much happier with the service anyways. We also get more channels and a better PVR and faster internet. So once a year or so I call Telus and see what’s what. Exactly the same as above, if they want to stay competitive, they will lower your costs. They are always coming out with new bundles of channels etc. This also works great for when you are paying for a channel bundle package and only watch 1 channel in it…they may have a new bundle that is more beneficial for you or you may want to cut that bundle entirely and pay just for that 1 channel. I think we are all guilty of the “Ooohhh that sounds like a cool channel”….then you watch it twice and go “ok maybe not” While you’re at it…if you have a home phone do you really need it? Sure youre “saving” money by having it in the bundle if you don’t use it whats the point? Save yourself the $20 and do something more productive with it. Some companies also offer bonus items…we got a free tablet for switching to Telus.
Mortgage Renewal
I don’t have a mortgage yet but am hoping to make that step in the next year (hopefully less), and while researching for it I found something quite interesting. Apparently a lot of people simply renew the mortgage when the time comes without thinking twice about it. This shocks me. Your house is probably the biggest purchase you will ever make, not negotiating terms is throwing money away. The wonderful thing about banks is that count on your being lazy. Simply don’t be lazy and you can easily beat the system.They offer their best rates to new customers and count on you just signing the dotted line at renewal without asking questions. Take your time and start looking around for better rates a few months before your mortgage is due for renewal and take time to negotiate with your bank. You are literally giving your money away if you don’t do this.
Lease Renewal
A few years ago, husband and I found a GREAT deal on a townhouse. We were renting a 3 bedroom, 1.5 bathroom, great square footage, awesome location, beautiful townhouse. We found it online advertised as $995 a month while all other townhouses we could find that were comparable were closer to $1200. We went and looked at it, fell in love (seriously the storage in that place was amazing…so was the basement….i miss it…) and decided to go ahead on the lease and moved in shortly after.
As our lease came to a close I started looking around again to get a sense of the market. Turns out things had gotten more expensive, now while we were paying $995 the comparables were upwards of $1400-1500. We braced ourselves for a rent hike and low and behold three months prior to the lease ending (which is the legal obligation of the landlord here) we received out notice. We could resign a lease at the same price! We were happy but I had already prepared myself for a battle. While we were happy with the continued rate I contacted the landlord to ask if he could decrease the price at all, he said no. So I contacted his boss who also said no. So I contacted his bosses boss who was based out of BC. The bosses boss said the same thing as the other two, we were receiving beyond fair market value for the home. I pointed out to her that while that was true, that we had an excellent payment history, we were good tenants and had actually improved the value of the home since being there (by doing landscaping in the back, installng a new and better thermostat etc.) and finaly she caved. We resigned the lease at $950. Again not a ton of money…but all these little things add up.
I worked as a landlord aka “customer service representative” for Boardwalk Rental Communities for a year right after high school, I learnt there that rents are negotiable. Always have been always will be. However the person at the front usually can’t do anything about it.
Insurance
I’m sure you are getting the drift now. Call them. Ask for a better rate. If you just got your insurance through a certain company because you heard good things, seriously consider calling an insurance broker. When husband first bought his truck he got insurance through a broker at the dealership as his previous provider (AMA) was going to change a crap ton of money for him to stay with them. After a while I did what I always do and got frustrated at how much we were paying a month in insurance. I called my broker and asked about combining the two vehilces on one plan. My heart broke…..by putting his truck and my car and the rental insurance together we would be saving like $100 A MONTH!!! How did I not make this call earlier? Since then I have also called and raised our deductible to $1000 (thanks to our emergency savings) and saved us another almost $50 a month. When our insurance is due for renewal in November I will be calling the broker again and asking if she can renegotiate our price. That being said, she is AMAZING and our insurance has decreased by $40-50 a month every single year at renewal without me asking.
Auto Payment
I haven’t tried this. But if you have a conventional loan you may be able to negotiable the interest rate or move your auto loan to a new place which has a better interest rate.
The Bottom Line
It never hurts to call and ask. Be persistant and proactive. Looking at the examples I have given above, husband and I have saved about $140/month or $1680 a year. Think of the options: That could be an emergency savings, go towards debt repayment, give you more money to play with, money to save for a house etc. Its worth calling! Yes, some of these things are time sensitive, you need to do at the time of renewal others you can call anytime. Its your money, take control of it and stop giving it away!
I Have To Do What?!? 