Money Talks, So Should You

Q&A: What regular monthly costs can I negotiate down?

Mechel Glass
by Mechel Glass, Dimespring Contributor  (@CredAbility)

I speak with many people who have little margin for error in their monthly budgets; they are concerned that they can’t pay their bills or save any money because of their high monthly expenses. I advise them that they can save money on a variety of services by asking for, or negotiating, a lower price.

The first place to look is the cost of utilities. There are many different natural gas providers and with the cost of natural gas dropping, it’s easy to shop around and get a very reasonable price. Many providers may want you to sign a one-year contract for service, but that’s OK. One option is to lock in a low price for 12 months and look for even lower prices at the end of the contract.

READ: How to protect your budget from financial surprises

Telephone service, for both home and mobile phones, is another place where savings are available. Again, there is a lot of competition for your business, which means that there are a lot of offers that translate into lower prices. Compare fees and plans before making your choice.

Understand that most large companies want to provide discounts if you purchase your phone and Internet service from them.  Again, compare prices and quality of service and read online reviews about the quality of these services before making your choice.

Finally, many mobile phone companies are now offering home telephone service. Be sure to test the quality of the service and ask for referrals from family and friends before buying this product.

Another service that is ripe for negotiation is home security systems. These companies charge one fee to wire your home and a separate fee for monthly monitoring.  Speak to several companies before choosing one; you may be able to get your home wired at no charge in exchange for a long-term monthly contract covering two or three years.

Credit card companies often offer lower rates to people that open up a new account or transfer their balances. But before going through this process, speak with your current credit card company to see if they will lower your interest rate. If you pay your bills on time and have been a good customer for a long period, they will not want to lose your business. Just don’t wait to call until after you miss a payment; it will be much more difficult to persuade a creditor once that happens.

READ: 5 things to consider while interest rates are low

There are several other categories of bill payments where you should also negotiate. If you have an unexpected medical bill, negotiate a lower payment directly with the hospital, especially if you don’t have health insurance.

You can also negotiate with your student loan provider. Ask for payments to be deferred, or try to extend the term of the loan from 20 to 30 years.

Finally, if you’ve fallen behind on your mortgage payments and are concerned about foreclosure, try to modify the terms of your mortgage. A toll-free telephone call to 888-995-HOPE will connect you with a nonprofit organization that will provide free housing counseling. Just understand that if you modify your mortgage loan, the term of your loan will likely reset. In other words, if you’ve made five or 10 years of payments on a 30-year loan, the modification could reset the term of the new loan at 30 years.

Mechel Glass is vice president of community outreach for CredAbility. She is responsible for coordinating community outreach and financial education activities across the agency’s regions and developing new education programs for both classroom settings and online. Glass, a U.S. Army veteran, is also co-author of “The Veteran’s Money Book,” scheduled for publication in April 2014 by Career Press. The book can now be ordered on Amazon.com.