You may not realize it, but there is probably money in your budget that needs to be “found.” What I mean is that you may be unnecessarily spending money each month. Most people I have counseled with over the years think their budget is good, but once we take a look at the budget we realize there is money that can be saved and taken from one category and put in another category to help eliminate debt. Let me explain this “found” money concept for you.
Many people have in their budgets rent/mortgage, utilities, phone, cell phone, cable, internet, insurance, credit cards, medical expenses, etc. While it may be difficult to change your utilities payments much, there are a few categories that you may be overpaying on for no real reason.
Let’s take a look at what happened concerning my cable bill. About 12 months ago I called the cable company and lowered our monthly bill by calling the company and asking what type of packages or special deals they were offering. I purchased a package that saved us about $30 per month for a year, which equates to $360. I didn’t realize the savings would end this month so here is a word of caution. Beware of these packages that might seem like a good deal. They will eventually end and you need to be diligent in watching your monthly billing statements. Last week, I received my monthly email notification for my cable bill and realized it had increased by approximately $45. I quickly scanned over the bill and noticed that all of a sudden I was being charged for the NFL package. Wait. Why was I being charged for this package when I didn’t even order it? So I picked up the phone and called my cable provider and asked why my bill had increased. The customer service representative told me it was because the package I had chosen last year included the NFL package for free for the first 12 months and after that the charge was around $45. I told them I was not interested in the NFL package so it was removed after only one phone call and a fairly brief wait time. So ALWAYS look over your bills to make sure they are correct and you are only paying for what you ordered and for what is necessary! My monthly payment should be the same as it has been for the last year now that the package has been removed.
Another place to look for “found” money is in your insurance policies. I would suggest that you shop around for the best price for the coverage that you need. Insurance companies welcome the opportunity to give you a free quote on insurance. I usually receive a couple of quotes each year once my policies are up for renewal. Make sure, however, the insurance company is a reputable A rated company. I would also suggest that you read reviews of the insurance companies to help you make the best choice for insurance. Many companies will quote all of your personal insurance policies such as auto, home, and umbrella. My family switched insurance companies and saved several hundred dollars per year or around $20 per month.
While on the subject of insurance, choose the deductible that makes sense for your financial situation. We currently have $1,000 deductibles on both auto and home. Deductibles generally range from $250 to $1,000 per incidence. The higher the deductible you pay, the lower the annual premiums will be. We chose the highest deductible because we are in a position to pay the $1,000 if necessary. If your budget does not allow you to pay the highest deductible right now, just choose the one you feel most comfortable with and then increase it as you become financially fit.
While looking for ways to find other money that was being spent unnecessarily, we realized that we were paying over $125 per month for a couple of storage units. When we rented them, we thought it would only be for a few months. We quickly downsized to one unit and eventually no units at all. We just found $125 dollars every month to pay on our debts. It was like we received a small raise!
You might also want to take a look at your telephone and cell phone services. It is almost a certainty that you are paying for services that just are not necessary and that you may not have even known you were paying for. An example of this might be that you are paying for a monthly long distance package on your landline when you never actually use your landline for long distance calls. For your cell phone bill, look over the data usage and make sure you are not paying for a larger amount of data than you would ever use. We purchased a bundled package for our home phone and Internet service and we now save around $40 per month on these services.
Concerning bank fees, I would suggest researching bank and credit unions in your area to find the one that offers checking accounts without a monthly fee. Let’s say you are being charged $8 per month for your checking account, you would be spending about $96 per year in bank fees on one account alone. A little time spent researching could save you money each month. We chose the account that does not charge a monthly fee which saves us $8 per month.
Let’s summarize our findings. Just by making these few simple changes, we have “found” $20 per month for insurance, $125 for storage, $40 for phone service, $8 for bank fees, and we are not going to continue the $45 NFL package so I will also include it. The monthly total is $238 and the annual total is $2,856! Not bad at all for making a few simples changes that are often overlooked.