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Automatic Bill Pay Concerns – DFA Tip of the Week – 4/20/2009

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There are many ways to reduce costs in our every day lives, so to help do just that each Monday I will post a money saving “Tip of the Week”.

“And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities.” Luke 19:17

This weeks tip involves…reasons NOT TO USE automatic bill payments.

Automatic bill payment can be one of the best ways to repair bad credit and is a very good thing 90% of the time.  It is the other 10% I would like to focus on today!

Do I Use Automatic Bill Pay?

You may be wondering if I use automatic payments for my bills.  The answer to that question is…sometimes, but seldom.  Actually the only bill that I have automatically taken out of my bank account each month is the payment for my 1st mortgage.  I participate with auto payment for my mortgage because I know the amount will be the same each month; not to mention the fact that I have a lot of faith in my Capital One 360 banking system (they will not take the money out unless I have it in my account – hence NO Fees!).

I have a few reasons why I choose not to be a frequent user of the auto debit bill phenomenon each of which are all most likely related to the fact that I am a control freak when my finances are involved (which is a good thing).  However, the most important reason I still pay most bills manually is because BILL COMPANIES AIN’T PERFECT. That’s right…I said “ain’t”.

What Happened To Me?

A few weeks ago my April Consumers Energy bill came in the mail, so I did like I do with all my bills & threw it in the trash.  Just kidding, though I sure would like to sometimes…what ever happened to getting hand written letters from friends in the mail???  Never mind.  After looking the bill over for just a few seconds I was surprised at the high amount & immediately suspicious.  Since March was not that cold we ran our furnace (our largest monthly cost) much less often than in February, yet our bill was more expensive.  Considering I do know utility companies will sometimes take “estimated readings” I immediately called them to give them a “more accurate reading” (the dirty dogs).  The woman assured me the reading was an actual reading, so I encouraged her check for the accuracy of the reading.  Sure enough, after a closer look she reported that there was an error in the reading and assured me it would be fix it immediately. The savings to me?  Nearly $120!

The Moral of the Story

If you use automatic bill paying features, MAKE SURE you check each & every bill for accuracy.  Though it may not happen every month, you may be surprised how many times there is a Monopoly type “banking error in your favor”.  Pass go, collect $200!

Click here to see all our past DFA Tips of the Week.

DFA is passionately dedicated to helping others break the bondage of debt using biblical principles.

Help When Overwhelmed by Personal Finances – DFA Tip of the Week – 4/13/2009

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There are many ways to reduce costs in our every day lives, so to help do just that each Monday I will post a money saving “Tip of the Week”.

“And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities.” Luke 19:17

This weeks tip involves…Getting Started.  I want you to consider the following quote, then read the rest of this article.  By the end you should be well equipped to get started on your very own Debt Free Adventure!

“A journey of a thousand miles begins with a single step!”  ~Lao Tzu

The Trap…

All of this Personal Finance business can be overwhelming!  Debt repayment vs. Reduce Monthly Bills vs. Saving & Investing, etc.  While all of these topics require your necessary attention, it is important that you do not focus on everything all at once.  You need to start somewhere, so here are a few tricks you can employ to get yourself started without falling into the trap of idleness.

Tips to Avoid the Trap…

To get your finances in order break them down into the 3 following main groups:

  1. Debt Repayment – Make a simple list of all the “consumer debt” you have including auto loans, credit cards, department store cards,  student loans.  Write down each debt, how much you pay toward it each month, and then add the debt of each up to come up with your total debt amount.
  2. Monthly Expenses – Write down all your monthly bills and how much each costs you per month (if amounts vary, come up with a guesstimate average).
  3. Savings and/or Investment Accounts – Make a list of all your savings accounts and investment accounts and write down how much you contribute toward each.

Once you have the above completed you are REALLY CLOSE to having created your very own budget!  That is the next step…finish these steps to complete your budget:

  1. Write down your monthly income – Do not budget weekly, bi-weekly, or any other way…budget monthly.  Write down how much monthly income you have from all sources.
  2. Write down all outgoing expenses – In a 2nd section, copy the information you compiled above regarding your monthly debt & expense costs and jot them all down and subtract them all from your income.
  3. Add any other expenses – You may have forgotten to write down groceries, gasoline, etc.  Figure any other expenses you have each month and add them to your “outgoing expenses” section to arrive at the total amount you spend each month.

Now that you have your first rough draft budget done, go celebrate by eating a cookie, dancing the jig, or doing anything else to express the joy you feel that comes from getting started on the path toward financial freedom!  When you are done dancing and eating dessert, look over you budget one last time to make sure you didn’t forget anything.  Ask your spouse to proof-read it as an additional check to see if you have left anything out.

Now commit to the following…

Now that you have your budget, you have your expenses, debt, income, & savings all written down and can start to wrangle everything in.  Commit to the following:

  1. Give 10% to the Lord – Read my Testimony to the Tithe and see how the Lord promises to bless you if you give, but also promises your indebtedness will continue if you do not.
  2. Contribute any amount to savings automatically – Transfer any amount, no matter how small, into your savings each month.  Even if it is just $20/month, make a promise to yourself that you will pay yourself that $20 instead of paying it in interest to some big bank.  Try to make this an automatic thing.  I HIGHLY recommend switching your banking to Capital One 360 to make all this easier.  Read about how I use Capital One 360 for debt repayment and emergency fund savings…and remember…this is all spoken from personal experience!
  3. Reduce your monthly expenses – follow my advice and work to reduce each of your monthly expenses, but do so one at a time.  Commit to calling one service provider a week to see about either switching, reducing your plan, or discontinuing that service altogether if possible.
  4. Tweak your budget – Your budget is a “living document” and should be given attention on a weekly basis.  Think about how you can reallocate your money after you reduce your monthly bills as we discussed above.  Continue to contribute more and more toward your debt repayment, and I advise you to focus the majority of your funds on this until your debt is greatly reduced.  Once your debt is considerably lower, begin contributing more toward your savings each month.  I currently employ a 75/25 plan where 75% of my available funds go toward debt repayment and 25% go toward savings.  Do what works for you, but again…I urge you to focus the majority on debt repayment!

Follow these simple steps to get started and remember to break tasks into their respective groups and tackle things one at a time.

Memorize the following quote:

“A journey of a thousand miles begins with a single step!”  ~Lao Tzu

Click here to see all our past DFA Tips of the Week.

5 Minutes to Lower Monthly Bills – DFA Tip of the Week – 3/30/2009

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There are many ways to reduce costs in our everyday lives, so to help do just that each Monday I will post a money saving “Tip of the Week”.

“And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities.” Luke 19:17

This week’s tip involves…saving money on monthly bills by simply calling & asking for a price reduction!

How much it saved me…

I started with Comcast and DirecTV whom I have for Internet & television providers respectively.  The reason I use both companies is a little complicated.  Originally I had Comcast for both Internet and television, but was not happy with being changed an arm & a leg for service, so I decided to switch to DirecTV.  Since DTV did not provide Internet service and because DSL is not offered in my new subdivision, I had to keep using Comcast for Internet.  Regarding television, I skeptically entered into a 2 year contract with DirecTV because I didn’t really have a lot of other options.

Now over a year after all my shifting around of services I was paying $63.95/month to Comcast for Internet along with $75/month to DirecTV for television – and so there went my other arm & my other leg.  Being armless & legless was making it quite difficult to get around so I finally decided to get off my lazy butt (pun intended), and make the calls to demand better prices!!  I did just that and ended up getting my Comcast bill reduced to $37.99/month and my DTV bill down to $55 creating an additional $46/month for me to put into my savings!

Now I’m just going to buy an HDTV digital antenna and get TV for free!

Use these tips when calling…

The CSR’s (Customer Service Reps) are trained to try to dissuade you from your dream of reduced expenses so I will now give you a few pointers in dealing with them:

  1. Maintain an excellent spirit when dealing with the CSR – The old adage, “You catch more flies with honey than with vinegar” is quite true.  Just think of how you would like to be addressed then give the CSR the same respect and courtesy.
  2. Maintain separation between the CSR and the company itself – This is quite a successful tactic that I have not ever heard anyone else mention.  Basically you want to create a distinction between the CSR and the company they work for.  This allows you to voice your displeasure with the company, while not attributing any of the displeasure to the person you are dealing with on the phone.  For example instead of saying, “You are charging me too much for Internet“, say something like…”I am just really unhappy with how much Comcast is charging me for service, especially with all the other options out there.“
  3. Get the CSR to empathize with your situation – Now that you have created that separation between the CSR and the company they work for, you are better able to place them in your situation.  Say to them, “What would you do if you were me?” Or simply, “How would you feel if you were in my shoes?“
  4. Use the company’s competitor’s prices and services against them – If you use Comcast for Internet, talk about the low prices AT&T is offering on residential DSL service with similar speeds.  Say to them, “I will stay with Comcast if they can match AT&T’s prices, otherwise I’m going to have cancel and go with AT&T.  I mean, what would you do if you were in my shoes?“
  5. Be willing to discontinue the service – Ultimately if you are not truly willing to leave your current provider, you will be less authoritative and they will be less likely to oblige you.  Make sure before making this decision you discuss it with your wife and/or family.  Be sure to explain the alternatives, and also key on possible benefits of cancelling the service altogether.
  6. Be confident and persistent – Just as you are much more likely to listen to someone who delivers a confident and meaningful argument, so the CSR will be too.  Before you call, make a plan of action.  Write down the reasons why you need the price reduced along with price quotes from several other providers.  If you are prepared and resolved, the CSR will have a hard time denying your request…it worked for me!!

I saved $46/month doing this…how much did you save by employing these tips? Make sure to let us know by leaving a comment below.

Have you already successfully gotten your prices reduced by calling?  Let us know about that too.

Click here to see all our past DFA Tips of the Week.