Calling the cable companies is almost as bad as accidentally grabbing a pan from the oven without the oven mitt on your hand (not fun). Even though it is a big pain, I call them pretty regularly just to check in and make sure I’m getting the best rate.
This time I ended up getting more “bang for my buck” if you will. Here’s what happened.
As I told you in a previous post (the power of extra loan payments), I cancelled my cable services as a way to save money each month. I kept the internet and have Netflix, so it’s really not missed as much as you would think it would be. SlingTV and Hulu Plus are other great options to check into!
I got a letter from my internet/cable company in the mail this weekend saying that “it had come to their attention” that I was not being charged for my HD cable box and they were going to start adding $10 onto my account beginning this month. I was quite intrigued since, as I just mentioned, I no longer have any cable services.
I gave them a call and was ready for a laugh as we tried to figure out why I received this letter.
I ended up speaking to the most level-headed agent I’ve ever spoken to at this company (I’ve spoken to at least 25 of them since January). This was quite a surprise since my service with them has been terrible. Anyway, it turns out that because I am a procrastinator and have yet to return my cable box, they are now charging me $10 for it. Oops.
Since I already had them on the phone, I mentioned that a competitor company was now available in my area, and they were offering basic cable and the same internet speed I have now for $50 a month. I asked her why I should stick with their company and not switch to the new one offering a much better deal. She surprised me by saying that she could not only offer me a lower bill, but had a new offer which was comparable to the one I had mentioned.
By “comparable”, she meant much better. They had a new deal that offered their fastest internet service, basic cable and HBO free for the first year for only $49.99 a month.
Before I let myself get too excited, I knew this had to come with a 2 year contract, so I asked.
No contract was required.
I now have cable, faster internet, AND am paying $10 less each month.
So much for them charging me more money.
Cable Company: 0
Here are some tips I use for scoring a lower cable bill:
1. Call at least once every six months to check on new promotions.
I usually call every 2 months or whenever I find a great deal on their website, but you don’t have to call this often if you’d rather not. There are often deals not listed on their website that you can take advantage of.
2. Get yourself to the right department.
When you call, make sure to hit the prompt for the “looking to remove one or all of your services”. This will get you get right to their customer retention department. These are the people who will be able to help get you the best offers.
If you select something else, you typically get bounced around between departments and waste your time. I’ve also found that getting transferred around increases your risk of being “accidentally” hung up on, so I try to avoid it at all costs.
3. See What New Customers Are Being Offered.
Before you make this call, jump on their website first and see what they are offering new customers so you have knowledge about what you want. Ask the agent why you should continue to be a customer of theirs if they are not willing to provide you with their best offer.
Sometimes they will come up with something better than you have now. Sometimes they put you on hold to “check with their supervisor” and end up offering a $10-$20 discount per month to get you closer to that price.
4. Check out their competitors website to see what they are offering.
Let the agent know what you found and that you are looking into switching if they cannot offer something comparable. Ask them directly if they can meet or beat that price.
5. Never sign a new contract.
If they offer you something you can’t refuse, let them know you will not sign a contract. If you absolutely must, make sure it is no longer than one year. After the first 12 months, companies like to jump the prices $20 or more a month, and you are then stuck in your contract with very few options. I have not been under contract for a cable company in years and this has given me the flexibility to be able to call every few months and negotiate a lower rate, or at the very least extend my promotional price.
6. Be Patient. This is not a quick process.
Be prepared to be on the phone for more than 10 minutes. I have been on the phone with them for 60 minutes before, but I have also had calls that only lasted about 8 minutes, but never any shorter than that. It’s a process, and they also seem to take their time – probably in hopes that you won’t be calling back anytime soon. Just be prepared and don’t allow them to upset you by keeping you on hold for a while.
7. Be kind, but assertive.
Being nice goes a long way, but don’t let them rush of you off the phone either.
8. Call back if you don’t get what you want the first time.
Yes, I’m serious. Most of the time, if one agent isn’t willing to “find” you a better rate, the next one will. You may have rubbed the first person the wrong way, or maybe they didn’t want to give you the better rate. Either way, hang up and try again.
Before I was fully committed to this whole “getting out of debt” thing, I was really flying by the seat of my pants when it came to tracking my monthly bills. I hadn’t even written a list of each months payments until a few months ago.
I would set up reminders here and there, but they would mostly end up going ignored. I somehow relied on my memory to get me through, which is quite scary when you consider that my friends call me “Dory”.
I’m honestly not sure how I was able to make most of my payments on time back then. I actually ended up making double payments on quite a few bills because I would forget that I had paid them and in a haste on their due date I would make another payment.
I would then be a month ahead on payments and get out of the habit of paying that one by the following month. It was a complete mess.
I’m sure that some of you are functioning the same way, under a form of organized chaos. Maybe you enjoy it, maybe you are finding it hard to keep up. I wanted to give you a little run through of exactly how I currently keep track of my monthly payments and debts in case you are one of those people who are looking for a way out of the mess.
How I Keep Track of My Bills & Payments
Completely opposite to how I “organized” my bills before, I am now a bit “anal” with how I pay my bills each month. I do everything manually and actually prefer it.
I use Evernote to keep track of my bills and their due dates. I do this to make sure I don’t forget any of them, as well as to allow me to visually see how they are broken up that month.
Evernote is run on a cloud-based system, so every change I make is saved regardless of what kind of device I am using. This is great for people like me who can’t even remember to put gas in the car until it beeps at me.
I keep my full list of my bills for the entire month in a note titled “Bills”.How predictable. Here is an example of what that list would look like:
7 – Cable bill- $65 7 – Credit Card bill – $50 9 – Gas bill – $45 9 – Netflix – $7.99 11 – Cell Phone – $75 15 – Rent – $500 18 – Student Loan #1 – $267 19 – Car – $192 24 – Water Bill – $55 Each pay – Gas, etc. – $50 Each pay – Yearly Bills – $65 Each pay – Car Insurance – $53
This list resembles my personal list of bills, but is more of a generic example.
Bills Organized by Pay Schedule
I separate the full list out into bi-weekly periods that coincide with my pay schedule. I add up the ones that need to be paid during that time frame and calculate how much of my paycheck I will have left over (which goes in parenthesis). That extra amount will go towards the debt I am currently focusing on.
I put the dates I need to account for at the end of a long line to break up with pay weeks. I then have the total of those bills listed, as well as the amount of my paycheck left over in parenthesis. Here is a visual of what I’m talking about:
—————————9/26 to 10/9 – $410.99 ($589.01)
7 – Cable – $65 7 – Credit Card – $50 9 – Gas bill – $45 9 – Netflix – $7.99 11 – Cell Phone – $75 Each pay – Gas, etc. – $50 Each pay – Yearly Bills – $65 Each pay – Car Insurance – $53
I make sure to include money I will need for gas to get to and from work so that I don’t end up without that in my budget.
So that first example looks great, right? I would have $589.01 to put towards my student loan. Well, it seems that way, but I always look ahead to make sure I will have enough to cover the bills for the following bi-weekly period:
—————-10/10 to 10/24 – $1182 (-$182)
15 – Rent – $500 18 – Student Loan #1 – $267 19 – Car – $192 24 – Water Bill – $55 Each pay – Gas, etc. – $50 Each pay – Yearly Bills – $65 Each pay – Car Insurance – $53
I would be glad I did take a peek ahead in this example. It looks like that $182 of that money I had left over during the previous time frame is going to be needed for the next pay period. This means I still have $407 extra to put towards my loans. Not bad at all.
I would then either just let that extra money sit in the checking account until the next paycheck came through, or pay off one (or more) of the bills that would be due during that next time frame during this period. It really depends on which bill is coming up. If it is a student loan payment, or credit card payments I will go ahead and pay it so I can save some money in interest.
The Strategy Behind Tracking Bills This Way
You may have noticed that I keep all of the bills in bold font. Each time I pay one of my bills, I change that line from bold to regular font. This leaves the unpaid bills looking more noticeable so that I don’t end up forgetting any.
I make most of my payments throughCapital One 360’s bill pay system. To stay on top of this, once I schedule a payment I will write “scheduled” next to that amount so I know that it will come out as soon as I get paid.
I typically stay on top of my bills pretty regularly, about every other day or so, just to make sure I’m not forgetting anything (again, they call me Dory for a reason).
There are things that I save up for in each paycheck, such as yearly bills, taxes, car insurance, and even upcoming weddings. This is something I just recently started doing so that I wouldn’t be caught off guard every six months or so when those bills crept up.
I used to end up putting these on a credit card and slowly paying them off. I think this new method is absolutely crucial to make sure you don’t end up back in debt by putting a big expense on a credit card.
Why Not Pay Everything Automatically?
Some people may look at my method and think I’m absolutely nuts. Why not just use automatic payments and have everything taken out on a more regular schedule? There is a reason behind this madness, I promise.
Since I am really hustling to get my debt paid off, I need every extra penny to go towards my student loans. As soon as I have the extra money, I want to make a payment to my loan company. This ends up in me paying less interest AND not procrastinating on making the payments every month, which was how I used to get myself in trouble.
I would tell myself that I was going to put the extra towards my payments once the next paycheck came, but then I never would. Something more important would always pop into the picture and the loan payment became secondary.
By immediately throwing my money at the student loan companies (that would actually be fun, wouldn’t it?!) I keep myself accountable for putting the extra money towards my debt.
I know my faults, and have learned to plan around them so they don’t get in the way of my goals. I find that this is the best way to keep track of my bills.
This week I wanted to talk about something that has become one of those things people say their doing, but really aren’t: making extra payments on your loans.
In my experience, I have heard a lot of people talk about how they are making extra payments on their loans but then when it comes down to it, they really just rounded up a few bucks to the next ten. Alright yes, it’s better than nothing, but it isn’t going to get you very far. I am also guilty of this exact thing. A few years ago, the minimum payment on my one loan was $267.
How much was I paying when I said I was making extra payments? $270. Yes, I’m serious.
In my August debt report, I shared that I had paid of $7k in just the previous five months. This is a huge milestone, and it’s something I never expected. Yes, I was the one who created my debt payoff plan and I knew I would be paying them down very rapidly. But actually seeing the amount of my debt decrease so quickly makes me realize how stupid I’ve been for the past 5 years.
When I got my first bill from this student loan company, the minimum payment was $267. I started paying $300 each month, and I was so proud of myself. I thought I was making a big difference in my debt. But in reality, it wasn’t helping as much as I had thought.
Here is a chart that shows my decrease in debt over the last five years.
Yes, it was going down but the amount was so minimal. Every time I made a payment of $300, $165 dollars went to principal and the rest would go to interest. That means my total debt would only go down $165 a month. So, my balance would go down $1980 each year. At that rate, I would have been paying off this loan for more than 25 years!
I don’t know how I didn’t see this before. I’m just glad I know now and can mention it to all of you. Make sure you really look into how long you will be paying off your loans.
Since I realized the real length of my payoff, I have been putting every $5 I can towards my loans.
The first 4 years of my loan payoff went like this:
Total Paid: $13,244 Total the balance decreased: $6,463.34 Percent of payments that went to Principal: 48.8%
That means that $6,780 was wasted. When you’re making less than $30-$40k a year, this amount is a huge percentage of your income. Doesn’t this make you second guess your payoff strategy?
Since March, I have been making extra payments and allocating every dollar I make by using a budget. This allows me to make large payments of whatever is left over after the bills are paid. Previously, I would just let that extra money sit there in my checking account, or put a little in savings, or go shopping.
This is what my payoff looks like for the last 5-6 months:
Total Paid: $7,294 Total the balance decreased: $6,372.65 Percent of payments that went to Principal: 87%
Making extra payments like this means I can get ahead of a lot of the interest that would have accrued. My balance has gone down almost the same amount in the last 6 months than it did during the first 4 years of repayment. That has got to resonate with some of you.
Where does that leave me?
Extra payments are important for a reason. It’s hard to understand that when people just run around telling you to make extra payments. I was the same way. I heard it was a good idea but I wasn’t really listening. I didn’t ever look into it for myself and see what the big hype was about.
I wrote this post to give you a real life example of how much of a difference a few extra dollars can make. You don’t have to take it to the extreme I am, but even an extra $100 a month can go a long way.
I challenge you to run the numbers for your own situation. How long will you really be in debt? If you don’t look into this, you’ll never really know when you’ll be able to start “stealthily” saving for retirement, a house, or being able to travel? When will you really be able to prepare yourself to be financially prepared for an emergency? Think about it. Student loans are tying up all of the money you could use for your future goals. You won’t be able to have a truly strong financial foundation until they are out of your life.
Why This is Important
To put this into perspective, there have been many articles lately about some of the elderly having their social security checks garnished for student loan payments because they weren’t ever able to get rid of them. 75 years old and still running from creditors. Can you imagine?
Life should not be about running from creditors and loan companies. See where you can buckle down and pay some extra towards your loans. Make sure when you do pay more than the minimum payments, that you are calling the loan companies to make sure they are applying the extra payments towards principal and not future interest.Here is a post I had written about this exact thing.
Leave a comment below and let me know one simple way you are planning to lower your expenses so you can put just a little more towards your loans. I’ll start…. (in the comments section)
Ever since I graduated college, I knew that my student loans were not going to be manageable. Really though, how do you pay almost $700 a month when you are working at the family restaurant around the corner?! I was always complaining about the payments and never really felt connected to my debt. I was just the victim, it’s all the government’s fault. Blah, blah, blah.
About 6 months after my repayment period began, I decided that consolidation was the path to freedom for me.
The only thing I knew about consolidation was that it was going to help me manage my payments better. I would no longer have to pay $680 a month towards my loans. The pressure to pay so much when I was making so little was going to go away.
I didn’t know that my interest rates would change, or that my repayment period would be extended. Heck, I don’t even think I realized that this wasn’t really saving me any money either, that I was just reorganizing my debts. These things seem so obvious to me now and I would love to go back and shake my 21 year old self until I read the agreement, or did ANY research into what I was doing.
It wasn’t the end of the world, but I could have picked much better timing to consolidate and gotten lower interest rates. I’m not extremely upset over it, it’s just one of those “woulda, coulda, shoulda” moments.
That’s why I want to share my story in hopes that it helps at least one of you along the way.
What My Consolidation Looked Like
When I decided that I was going to write this post, I knew I was going to have to pull out the paperwork and see what exactly I had done. I was actually pretty nervous about going through my files to find my consolidation paperwork. It was the first time I’d actually felt scared about knowing the truth. I had no idea what I was going to find since I honestly didn’t give the whole process of consolidation much attention at the time.
When I finally got the courage to find the paperwork, it wasn’t as bad as I thought it was going to be. Keep in mind that I was only able to consolidate the federal loans I had. There weren’t any places I could find that would consolidate private loans a few years ago. I’m sure there were a couple but I never found them…thankfully.
Here is what my federal student loans looked like prior to consolidation:
Loan #TypeBalanceInterest Rate
1 Subsidized $904.40 2.47%
2 Subsidized $957.54 6.80%
3 Subsidized $4,902.01 6.00%
4 Unsubsidized $1,906.67 6.80%
5 Subsidized $4,015.84 6.80%
Here is what I ended up with after everything was consolidated:
1 Subsidized $10,650.53 6.25%
2 Unsubsidized $1,878.70 6.25%
I did screw myself out of a pretty great interest rate with the smaller loan, but that loan wasn’t such a huge amount so I’m not kicking myself too hard. (Keep in mind – I didn’t actually save money even though the newer amounts were slightly lower. This process took a while and you were expected to make payments during that time).
How long does it take?
Consolidation is a pretty long process. When you apply they need a lot of information about your current loans, your other debts, and all of the personal mumbo jumbo you would expect them to ask. They also have you select a repayment plan (standard, graduated, etc.).
Looking at my promissory note, it was signed on October 11th, 2011, meaning I probably filled out the application that day.
On January 5th, 2012 I received a note from them thanking me for applying for consolidation. It asked me to look over the loans listed to make sure I wanted to consolidate all of them, and that there were none left out. It also said my loans would be consolidated within 10 days if I did not contact them to make any changes.
20 days later I received my consolidation confirmation letter showing the new interest rate and loan ID numbers.
This process took more than 3 months from start to finish for me.
What’s the big deal?!
I guess the thing I’m most upset with myself over is the fact that my repayment plan got so much longer by me not digging in and paying the $680 each month. I was making ends meet, I wasn’t starving and unable to pay my rent. I was just a stubborn kid who felt like $400 needed to be allocated each month for alcohol and having a good time.
If I would have kept making those high payments, my loan balance would be $1200 and I would have been done paying my federal loans this December…..
I’ll call that a $6,000 mistake.
Words of Advice
If you haven’t consolidated, make sure you know exactly what you’re getting into. It’s not a one size fits all program. If you aren’t someone who will stay motivated to get out of debt and make the extra payments that will keep you from being in debt until you’re 50, the higher minimum payments might be the right choice.
This was definitely the issue I had. I always told myself I’d make the extra payments when deep down I knew that they wouldn’t be my first priority. Who knows, if it weren’t for you all keeping me accountable for getting my debts paid off, I’d probably be slacking off here and there today too. No one is perfect. You just have to know enough about yourself and your habits to make the right decision for you.
Getting out of debt is the main goal here, so make sure you aren’t putting yourself deeper in the hole just to have some temporary/false relief. Be honest with yourself – are your payments really too high, or are other aspects of your budget set much higher than they should be?
No one is going to pay off your student loan debt. A stranger is not going to walk up to your door and hand you a check for $100k.
No matter how much you and your friends fantasize about it, you are not going to win the lottery and be able to pay off your friends debt as well as your own. (How awesome would that be?!)
You likely won’t marry someone who turns out to be a secret millionaire. I’m sure it happens, but you need to stop depending on this fantasy of someone coming to rescue you out of this pit. Your knight/dame in shining armor is….yourself.
The person in the mirror is the only one who is going to get you out of this mess.
It takes hard work and commitment to get out of debt, but you can do this. I promise.
2. You will fall down a few times before it’s all over.
Your car may break down and cost way more than you’d think to fix it. You might end up with thousands of dollars in medical bills because you decided to run, not walk, down the stairs to your basement. You may even have your two best friends get married in the same year and they both want you in the wedding – goodbye, savings account.
I’ve only been really working towards this for about 6 months and all three have happened to me in some fashion.
Just get ready for it, because it’s going to happen. Life likes to throw you curveballs to see just how dedicated you really are to this new lifestyle you’ve taken on.
Will you just give up and let debt come back into your life?
3. You may lose friends throughout the process.
Some people are pessimists by nature. They like to see people fail, so they may tell you that what you are doing is stupid, and that everyone is in debt. That’s just the way it is, they’ll say.
Everyone is not in debt.
Rich people don’t get rich by taking out loans and having car payments the rest of their lives. They are smarter than that. Just because your 5 closest friends are in debt, does not mean that everyone is. It just means you may need to find new friends – people that build you up and know that you have more going for you than you realize.
You are going to need a lot of support while you are doing this. There will likely be people that laugh at you for choosing not to go out to eat and get drinks with them every weekend.
Just remember that you will have the last laugh. They will still be broke in a few years, putting half of their paycheck towards their minimum payments, and you will be able to save half of your paycheck for your upcoming vacation.
4. You will also find your “true” support system
There are going to be people in your life who stand up and show their true colors, in a good way. These people’s encouragement is going to be crucial to your success. Having them there to counter the laughs and negativity you get from others will make all the difference. Your bonds with them may grow a lot stronger through the new, “cheaper” activities you grow to enjoy.
You may even find that your spouse is a lot stronger than you had previously thought. Their help and support may be that extra push you need to keep going. If things are serious enough, they too have a stake in your financial future and should only want to see you succeed so you are able to reach your goals together.
5. Going through this process will change your ideas of wealth.
Remember how you dreamed about driving that $60,000 convertible one day? I doubt that will still on your goals list once you are done with this. Money will just seem so much better spent on tangible items that don’t depreciate in value so quickly, like a home for your family or your child’s 529 college savings plan.
If you’ve ever had to give up an addiction you’ll know what I’m talking about. While you’re in the middle of it, that cigarette or beer doesn’t seem so bad. But when you couple it with the other pack a day you smoke, or 6 pack you drink, it can be hazardous to your well-being.
The same goes for blowing money on small items that really don’t get you anywhere. It’s like a shopping addiction. Maybe your drug is new clothes or finding the most “deals” on eBay. Maybe you’re in it for the bi-weekly restaurant outings or having the latest and greatest technology advancements. Because, if you wait for the next iPhone to come out you’ll be behind the times! What a ridiculous concept.
Whatever your addiction, having to struggle through paying off your debts will likely change your views on how important those things are.
6. You will have a newly found sense of freedom.
The struggle you go through while getting out of debt is going to be stressful at first. But once you get into it and really see those debt amount decreasing, it will become like a game. How much extra can I put towards my loans this month? Can I really out do last month’s milestone?!
You may get a little obsessed with it, but I think this is a good obsession to have. You may find yourself enjoying this “game” a lot more than you thought you would.
Once you come out of your “debt closet”, and show the world you are no longer hiding your actual net worth, your life is going to change for the better. There is no substitute for the feeling of not having to hide what’s really going on in your life. Not having to pretend you can afford something is extremely freeing. And honestly, people will judge you a lot less than you think.
Free yourself from the shackle of loan payments, change your bad habits to good ones, and show people how awesome being out of debt really is. I cannot WAIT to do the same.
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