Where Are You Overpaying? Checking those Fixed Items.

Many times people who try to live on a budget are considered cheap or frugal.  I can recall some times in my life when I wouldn't buy something that was $10 because I didn't have the money for it.  For most, they would say something like, "Oh come, on, it is only $10."  What I was really saying, is that thing was not as important as the $10 in my pocket and I don't need that.  For some that may be considered cheap, but it is a matter of when to say no to something and avoid the pressure to spend uselessly.

This is where the budget can help us, but for many of you, there are things in our budget that we just simply cannot control. They are commitments we have made, subscriptions we have/need and they are consuming a good majority of our spending.  I want to tackle a bit of what those are, where I coach people to find more space, and how we challenge our thinking on these things.

1) Internet:  We are in a day and age where everyone needs home internet but how much you pay is key. A quick search showed me that the average price of internet in PA is just under $67 per month. Sweet!! I'm winning here.  I'm paying $40 a month right now after I challenged them last year to get my price down.  3 years ago I purchased a cable modem, so switching is super easy and there are 2 providers in my area. And before you think I have the lowest plan, you are wrong, I believe I'm at 250Mbps, which is plenty fast for any streaming capabilities. When you see the price go up, or better within the year of your contract, contact your provider and see if you can get a discount.  Many times, they will come down at least 2-3 times the more you look to cancel.

2) Cable/Streaming Services: When I first started dialing in my budget I believe I was paying over $200 a month for Home Internet, Cable, and Phone.  We then when 100% streaming, got rid of the home phone (since we barely used it anyway) and went back to just the internet. There are lots of streaming services out there and if you need to cut back, just opt-in for the option with ads. It is not going to kill you to sit through the 60s of ads every 15 minutes or so.  Someone posted this in a group recently that showed you could save $546 a year, just by choosing the service that included ads (if you had all these services).  Now how many streaming services do you have? Do you need all of them? What is the annual cost of those services?  When you look at things this way, it allows you to think through the situation fully and see if that $10 or $8 per month is worth what it is doing to you.

3) Cell Phone: I believe this is the number one area most people overpay on their budgets.  Phones today are more expensive than most computers and people put them on payment plans as part of their bill, so they are oblivious to what they are paying in reality.  So let's break these down. For one, you can get a phone on your own for roughly $2-300, unless you have to have the latest Apple, then you are agreeing to a pretty steep price tag, but go for last year's model and get yourself a win, if you absolutely cannot stand Android. In truth, Androids are cheaper because there is competition in the marketplace.  The average cost for a plan is $144 a month according to Money Lion. Now obviously this is a hard one to judge as everyone has different line needs, data needs, etc. but it is a good benchmark.  Once again, this is an area I believe we are winning in. Google Fi just updated their plan, so my last bill for 4 lines, unlimited talk, text, and data was $121 a month. Again according to Money Lion, AT&T's average cost is $50 per line, Verizon's $70 per line, and T-Mobile's $60 per line. Add to that a phone "rental" charge of $20 or more per line and you have a pretty high cell phone bill. At one time mine was well over $200 a month for this very reason.  

How do you fix it? 

1. Pay off the cell phone you are currently "renting."

2. Agree to only buy a phone when you can afford to buy a phone.

3. Get a phone that is unlocked so you can switch carriers (note, you need to know if you are going to be geared towards GSM or CDMA type carriers in most cases). Watch during the major new release times to get a great deal on a new phone or last year's model. Buying a phone is much like buying a car, once the new releases come out the prices come down and there are plenty of people who want to keep up with the trend and will sell their old phones too.

4. Keep an eye on the smaller providers, they use the same towers as Verizon, AT&T, and T-Mobile, but do not carry the big budgets, so they pass those savings onto their customers.  

5. Go, just do it, don't be afraid. If it doesn't work, you are not locked in and can always switch.

ONE WATCHOUT: Know your current contract and talk to your provider to find out if there are any hiccups. Many of those big company agreements say they are not locked in, but there are additional charges for your phone or other things if you are not careful, so be prepared, so you do not get hit with an extra charge after the switch.

4) Others such as Insurance, Special Services, Electric Rates, Security, etc.: There are a bunch of others and this is where it is unique to you. What services do you have that keep going up and you have not looked at? Everyone is different, some other categories that I have include pest control, home security, and YNAB.  

Look at those fixed categories and find some freedom for other more important things in life!

* Money Lion Article on Phone Plans