Dropping Nickels

Have you ever fallen victim to late-night television ads during a bout with insomnia or worse yet got sucked into your Facebook timeline or Instagram? C’mon. I can’t be the only one! This is where I have fallen of the budget wagon more times than I care to admit. They make it SO easy with their small down payment of $X followed by 6 easy payments of $? (something bigger than X). It’s too easy to just see the small payment you have to make today to get the pretty, sparkly thing they have splattered all over your timeline especially if you have been really careful this month shopping sales and clipping coupons so you actually have the extra $20 you need to sign up and that’s exactly what you do. Then the next payment rolls around and you don’t have the money or worse yet, you had to give them a credit card or debit card (I hope it was neither but prefer debit over credit) and if you don’t have the extra money in your checking account you know what that means. Oh sure, the bank will honor the transaction while attaching a hefty overdraft charge – yuck! This can get ugly fast!

For this exercise, you will need the last 3-months of your bank statements. I hope you didn’t use a credit card but if you did, you’ll need the last 3-months of those statements as well. Why 3 months? Because some of this stuff they sucked you into may be billing you on a quarterly basis instead of monthly. These guys are ruthless, trust me. We need to clean the financial house from top to bottom. I need you to go line by line looking for anything that does not sustain life. Let me see if I can help you; Stitch Fix, Sling, Music Club, Fabletics, Pelotone, Hello Fresh, Astrology/Horoscope, Planet Fitness, Bark Box and Netflix to name a few. First let me say that none of these are bad and if you bring home enough money to support all of these luxuries then knock yourself out. But I’m guessing that most of you are going to have to cut out 50% or more of these, at least initially, to balance the budget.

Next, I need you to pull out your cable bill. How many of you are paying for service to rooms in your home or apartment that no longer have a television/device in them. Yup! Happens all the time. Even if it’s just one, that money is leaking out of your checking account and you don’t even notice it. A buddy of mine calls this dropping nickels. The crazy thing is, those nickels add up fast! Crawl into your cable bill further. Do you watch all of the channels you are paying for? Let me tell you how these companies suck people in. When you first start service they always have a promotion for new customers. You know this because you signed up for one just like I did and you didn’t call after the promotion ended to make the necessary adjustments just like I didn’t. So, now you are loaded up with cable, internet, a phone line, Show-Time, Cinemax and the NFL Ticket! Hey, I get it. It’s not all your fault. It was cheaper to bundle the cable, internet and phone than it was to have basic cable when you initially signed up for service. They played you! They knew the majority of us would forget to call back when the promotion ended and the new, higher fees would just keep dripping out of our checking accounts because let’s face it, you signed up for the $10 monthly discount for auto-debit just like I did. Man. These guys are slick! Well that ends today. Pick up the phone and call your cable company ASAP. If your experience is anything like mine, let me fore-warn you; this is going to be brutal but is has to be done. Get a good night’s sleep and get your guard up before you make the call. They may try to sell you a new package and that may be the best choice for now but you absolutely must set a tickler in your calendar to contact them when the promotion ends. If there are no promotions available, take the time to consider all of your options and save as much money as you possibly can. You may want to take a break here because we are moving to the cell phone bill next.

My father would roll over in his grave if he knew how much money I’ve wasted on my cell phone bill over the years. How did I let this happen? For me and probably many of you, I let the cell phone company, my kids and my desire to maintain current technology put me in a very bad situation. Before we discuss ways to trim the fat, let me say this. Like me, some of you have careers where it is critical that you have access to current technology. However, that is no excuse to overpay for said current technology. So let’s start with the bill. Look at every charge. Are you using every device you are paying for? Several years ago, I took advantage of an offer to purchase a tablet for $20 and gave it to my youngest son. I was paying $10/month for service on this device. A quick phone call revealed he hadn’t used it in months. How fast can you say, “disconnect”?

Next determine exactly how many lines you truly need then look at the data packages. I believe most, if not all of the carriers now offer unlimited talk and text. They are gouging you on your data usage. Before you pick one, stop and think about how much access you have to wi-fi these days. Chances are you have it in your home and have you noticed that nearly every restaurant/retailer offers guest wi-fi service as well? Now, public wi-fi is probably not the best place to do your online banking but if you’re simply searching for the latest coupon for your favorite craft store, you’re good to go. What I discovered is that I didn’t need unlimited data. What I needed was discipline – ouch! First, I adjusted my settings on my phone to alert me when wi-fi is available and second, I went into my online account and allocated the data I did purchase to the various lines. I also, adjusted my settings to alert me when a line was about to run out of data because I had the option to shift the data between lines if I so chose, ha! It’s no different than the budget we created in the last chapter. For example, if one of your children used more data this month for reasons out of their control you can give them some of your data. And if you have a child that is careless, they will either learn to manage their data usage or live without it.

The next trap is “you’re eligible for an upgrade”. STOP! This is your opportunity to save money, not spend money. You know when you upgrade, most carriers rope you in for another 24 months making it difficult to switch carriers, right? This happened to me last December. My phone was paid off which made me eligible for an upgrade which also meant I had no further obligation to my current carrier, who I won’t mention other than to say they worked with me on several occasions throughout the years when money got tight BUT that came at a very high price. I’m not going to go into all of the details here. Just know that when you switch carriers, there is usually a promotion. For example, my new carrier gave me $900 toward my new phone when I traded in my old one. I’ll take it! I gave them the difference in cash and bam! Just like that, I had the latest iPhone and it was paid for, automatically reducing my monthly bill by around $50/month. Sahwheeeet! I also paid off a device that belonged to one of my adult children, disconnected it and said use it with wi-fi or add it to your own account if you need data. Hallelujah! FREEDOM!

Insurance is another opportunity to save money. We definitely need insurance to protect our families from disaster but again, we get lazy. Maybe we shopped rates when we first got insurance… how many years ago was that? Some of you haven’t shopped rates since! Hopefully, your insurance agent is taking good care of you by suggesting you bundle your policies with one carrier which usually comes with multi-car/multi-policy discounts. I need you to understand something. Insurance companies, cable and cell phone carriers are businesses who must remain competitive or they will get priced right out of the market. What that means is that they are always bringing out new and improved and often more economically priced products and services so they can maintain their market share, increase revenues and keep their shareholders happy. This is great news for the consumer if you exert a little effort. Actually, it’s pretty easy if you have access to the internet. There are services that will shop your rates for you – how about that?! Be sure to watch out for extra charges for towing, road-side assistance and rental car services. If you are a member of Triple A (AAA American Automobile Association), you may already have these services.

Bank Fees can be another nightmare. Look at your bank statement to see how much you’re paying in monthly service charges. Free checking used to be more available but now it seems you have to keep a minimum balance in order to avoid a service charge. That might be ok for some of you but not others who are just getting started. My bank recently merged with another bank. Admittedly, I did not read all of the correspondence surrounding the merger. But when I saw a monthly service charge in excess of $50, they had my full attention. What in the world?! As it turns out, I am now limited to 25 debt card transactions per month, which I can easily blow through in a weekend – geez Louise! After the first 25, I am charged 50 cents every time I swipe my card! I carry cash but if I want to track an expense and not have to worry with hanging on to the receipt, I swipe my debit card. Not anymore! I got a little creative and found a loadable debit card with no fees that I was able to connect to my checking account. It allows me to transfer funds to the card (this counts as one of my 25 free transactions), then I can pay for things like gas, groceries, lunch and dinner without racking up a ridiculous monthly service charge. There is an added BONUS to this strategy as well. You can also use a loadable debit card to pay your bills online like cable, cell phone, electric, etc. Think about this. If you have been wanting to sign up for auto-debit to receive a discount but have hesitated because your budget is tight and you’re afraid the bill will draft before your paycheck is direct-deposited, this might be a solution. If the charge tries to draft from the loadable debit card and there is no money on the card, the charge just doesn’t process; no overdraft fee – woohoo!. Once your direct deposit hits, you load money to the debit card and the charge processes successfully. Viola! One last note here. Don’t be afraid to change banks. Years ago the big reason was you didn’t want to have to restart your check number at 101 – did I just date myself? I believe I did! Very few people write checks anymore and even if you are one of the few who still do, no one cares about your check number. When you order your checks you can start at any number you want. Yes, I know it’s a little bit of work to change your direct deposits and/or bills with auto debit but if your service fees are out of control and your current bank doesn’t offer a better solution, you need to shop around.  And never be ashamed to claim a free account if you are a senior, student, military, veteran, etc.

I think you guys are starting to get the picture. You can’t just buy something and forget about it until it breaks. Being financially responsible means you are proactive; regularly evaluate your bills to insure you are not overpaying for a service. Yes, it takes a little time but dropping nickels is expensive and personally, I don’t have money to waste.