Episode #46: What To Do When Your Monthly Bills Go Up - How To Negotiate Bills
If you’ve been around here for a while you’ve heard me talk about the importance of lifestyle creep and making sure that you don’t unknowingly bump your expenses up higher and higher over time. BUT, lifestyle creep isn’t always a direct result of your actions. The question that many people have is:
what do you do if your living expenses increase because your service providers just keep raising their rates?
Something many people don’t realize is that it’s absolutely within your power and your rights to negotiate a lot of your recurring bills. The best part about this is that because customer retention is so important and so cost effective to a lot of companies, you have a high chance of success negotiating a lot of your recurring bills when the prices increase. Most companies want to keep you as their customer more than they want to get that extra $10.00 a month out of you. So, in today’s episode I’m going to walk you through 6 negotiation tips to help you feel more confident renegotiating your recurring bills. Put all 6 into practice, and you can save yourself literally thousands of dollars over time.
Sometimes rate hikes happen annually, and sometimes you’ll know exactly when your introductory rate expires. Either way I recommend setting a date in your calendar to review all of your recurring bills and expenses. Look for services that have hiked their rates in the past year, and make a list of which ones might be able to be renegotiated. For example your phone bill, internet bill, insurance premiums etc.
If you’re not used to negotiating, you’ll probably feel a bit nervous to pick up the phone. You might worry about what to say, but remember it’s completely acceptable to negotiate your bills. It does get easier, and it’s important to remember that the sales associate on the other end of the line doesn’t mind discussing your rates with you. There’s nothing personal, or rude about it at all. So if you’re keen to try negotiating some of your bills back down again, but feel a little nervous about giving it a go, here are 6 tips that I use to negotiate my bills regularly. Doing this has saved me thousands of dollars over time, and will help you start saving money like this as well.
Negotiation tip #1: Do Your Research
Before you call in, make sure you’ve done some research and discovered what other introductory rates and offers are available from other companies offering a similar service. If you’re lucky, some companies have automatic price match guarantees. This means as soon as you bring them a competitive quote they’ll drop your rates back down to match that quote. Most of the time though, companies will be able to reduce your rates, they just make you work a little bit for it first.
So make sure you’ve done your research, maybe make a list of competitive offers from other companies, and then call in and say something like:
‘Hi there, I have a few questions about my recent bill. I noticed my rates have gone up since I first signed up, and I’d like to see what we can do to lower my rates. Is this something you can go through with me?’.
More often than not the sales associate will say ‘I’m sorry, but you have the lowest rate for your service that we currently offer.’ in which case you can start to negotiate, pulling from the other competitive offers you’ve received. Most of the time after a little bit of friendly back and forth, the sales associate will give a little ground and be able to find some special promotion that they can apply to your bill for a certain period of time.
Sometimes though you just won’t get anywhere with the sales associate, in which case you can move on to tip #2.
Negotiation tip #2: Ask to Cancel Your Service
If the sales associate you’re speaking with isn’t budging, say something along the lines of ‘okay, thank you for your time and help with this, unfortunately this rate is just more than I want to pay for my service, so I would like to cancel my account. Can you transfer me to someone who can help with this?’.
Most big companies, like internet providers, will have a customer retention department. These are the people who can cancel your service and contract for you, but before they do that they often have the power to offer you better rates, deals, and services that the first level of sales associates couldn’t find for you.
Again use your script of ‘I would like to cancel my service please because the rate is more than I signed up for and more than I want to pay. x company has offered me this rate so I’m going to switch to them’.
If you’re feeling a little worried about this tactic because you don’t actually want to cancel your service, just remember: The truth is that the person on the other end of the line doesn’t want you to cancel your service either, and will almost never respond right away with the steps to cancel your account. They’ll either offer you a discount, or offer you an improvement in the service. From there, you can either accept their offer right away, or continue to negotiate.
There are often several layers of savings or temporary discounts that they can layer onto your account. If you decide that you’re actually sort of enjoying this and want to see how good of a deal you can actually get, then you can move on to negotiation tip #3.
Negotiation Tip #3: Ask About Specific Discounts
Some companies offer discounts that can continue to be applied to further reduce your rate below what you’ve already negotiated. These discounts vary based on what service and bill you’re negotiating, but some examples include: loyalty discounts, student discounts, discounts for paying the annual fee up front instead of month to month, and discounts for using snow tires instead of all season tires in the winter for your car insurance. You can sometimes also get referral discounts if you get a family member to sign up for the service.
There are so many different types of discounts you may be eligible for, it’s worth doing a bit of thinking and research to figure out what type of discounts the company offers and how they can be applied to you. And last but not least, one of the biggest discount categories actually leads us to our next negotiation tip which is:
Negotiation Tip #4: Bundle Your Services Together
Many companies will offer discounts if you bundle multiple services together, or bundle other family members together under an account. This doesn’t apply to every company and service, but lots of companies offer multiple services like internet, tv, phone plans, and home security. You can save a lot of money on each of these services by bundling them together.
The same goes for car insurance. You can save lots of money by having everyone in your family use the same car insurance provider. Bundling services together is a great way to save a lot of money. It can often take a bit of time to negotiate because they’ll usually transfer you back to another sales agent to talk about plans for the other services you’re adding on, but it’s well worth it and sometimes qualifies you for additional loyalty discounts as well.
Negotiation Tip #5: Be Persistent
Sometimes you’ll find yourself speaking with a sales associate who just doesn’t seem to be interested in helping you. Maybe you got off on the wrong foot with them, maybe they’re having a tired day and don’t feel like negotiating, or maybe they’re actually telling the truth and can’t help you reduce your rate any more. Either way it’s well worth learning to recognize when you’re not making any progress. Cut your losses, and thank them for their time before you hang up the phone and try calling back again to speak to someone different.
I’ve saved $30.00 a month on my internet bill through an easy conversation with one sales associate, while 10 minutes previously I’d been having a conversation with another associate who swore that there was nothing at all they could do to lower my rate any further. This can be frustrating, but that’s just how sales works! It’s up to you to get good with your negotiation skills and increase that comfort level so you don’t get frustrated or worked up if you’re not getting anywhere. You simply need to try again and speak with someone else. The difference in results can be night and day.
Negotiation Tip #6: Be Kind
I feel like this is often an overlooked negotiation tactic. Many of us think of media and movie portrayals of negotiation tactics. It brings to mind men in suits, yelling at the little guy and abusing them into giving them what they want, and that’s just not how it works in real life
As my Nana often said to me, you will always catch more flies with honey. Being kind always wins, and it keeps you from starting to hate negotiating because you always end up frustrated and yelling. Don’t try to be a tough-ass negotiator and intimidate or bully anyone into giving you discounts. Instead be firm about what you want, flexible with how you get it, and kind to the person who is going to help you get it. They’ll be much more interested in helping you if you ask them how they are, how their day is going, thank them for looking into things with you, thank them for transferring you to the right department. Say your pleases and thank you’s, and watch your tone of voice.
Always remember that the person you’re speaking to on the other end of line probably spends their whole day doing this, and if you can help to brighten their day a little bit then they’re much more likely to want to help you. Being kind when you’re negotiating with most people usually means you’ll get closer to achieving what you want, you won’t ruin someone else’s day in the process, and you won’t hang up feeling frustrated. If the person on the end of the line isn’t meeting you on that level of being kind then just hang up and try back again.
Following these negotiation tips should help you save money on a wide variety of your recurring service bills. It’s always a good idea to negotiate your bills at least once a year. Rate hikes commonly happen without you even knowing it, and it’s easy to find yourself paying hundreds of dollars more a month than you need to be for all your services! Last but not least, always remember that it does get easier. Negotiating is just another skill to practice and become more comfortable with over time, and working through these 6 tips every year is a great way to practice!
Want to learn more? Check out the resources below!
Want to take the next step in your financial journey? Grab one of my free resources to start making moves with your money:
3-Day Personal Finance Challenge: Break up with broke and start building financial confidence https://howtoadultschool.com/personal-finance-challenge-download-page
First-Time Home Buyer’s Guide: Everything you need to know before buying your first home https://howtoadultschool.com/first-time-home-buyers-download-page
Expense Tracker: Finally feel in control of your spending with this easy-to-use tracker https://howtoadultschool.com/expense-tracker-download-page
My favourite personal finance tools:
Wealthsimple (High Interest Savings, Investing & TFSA/RRSPs): My favourite platform for personal banking AND investing wealthsimple.com/invite/OB9NB7
EQ Bank (High-Interest Savings Account): Another great option for high interest savings accounts (for Canadians) join.eqbank.ca/?code=CORYNN4617
Ready to get serious about mastering your finances?
Financial Foundations Course: Learn every personal finance skill we all *should* have been taught in school. https://howtoadultschool.com/financial-foundations-course
Investing Essentials Course: Learn to invest with confidence and grow your wealth https://howtoadultschool.com/investing-essentials-course
Group Coaching Subscription: Get expert guidance and support every month https://howtoadultschool.com/group-coaching-program
Some of the links above are either affiliate or referral links meaning I receive compensation from their use. By signing up using these links you can help support my work.