Summary

The article outlines a strategy to save $1,000 in a year by reducing monthly bills through eliminating, switching, or negotiating services.

Abstract

The article provides a practical approach to saving money by focusing on reducing recurring monthly expenses. It suggests that instead of relying on willpower to cut daily spending, individuals should review and adjust their regular bills. By aiming to save $84 per month, a total of$ 1,000 can be saved over the course of a year. The strategy involves a comprehensive review of all regular bills, followed by either eliminating unnecessary or duplicate services, switching to cheaper alternatives, or negotiating with service providers for better rates. The article emphasizes the ease of this method, suggesting that it can be accomplished in a single focused weekend, and encourages readers to be aggressive in cutting costs, even if it means giving up services they rarely use. It also points out that many people pay for multiple similar services without realizing it, such as roadside assistance from different providers. The article provides examples of areas where savings can be found, including internet, phone service, and car insurance, and encourages readers to be proactive in seeking discounts or downgrading plans to save money.

Opinions

The author believes that relying on future willpower to save money is unreliable and that a more effective approach is to reduce background spending on monthly bills.
The article suggests that many individuals are likely paying for subscriptions or services they do not use or need, and that these should be eliminated.
It is the author's opinion that switching service providers can lead to significant savings, particularly in areas with multiple providers like internet and phone services.
The author advocates for negotiating with service providers, stating that it is possible to obtain discounts or alternative plans that can reduce monthly expenses.
The author acknowledges that while some sacrifices may be necessary, they are often reversible if the consumer finds the reduced service level unsatisfactory.
The article implies that consumers may not be aware of the full extent of their monthly expenditures and that a focused effort to review and adjust these can yield substantial financial benefits.

The Easiest Way to Save $1,000 This Year

You can do it in a single weekend

Most advice on frugality focuses on cutting your spending as you go about your day. No expensive coffee. No impulse purchases.

The problem with this strategy is that it relies on something that is by nature unreliable: your future motivation and willpower. Future you doesn’t care that you resolved not to make impulse purchases; future you is hungry and wants a KitKat from the vending machine.

A better way to save money is to tackle all the money that’s being spent in the background. The stuff that’s quietly withdrawn from your account every month without you noticing. It turns out that saving $1,000 in a year is pretty easy when you realize you have 12 months of bills to trim.

Here’s the way you should look at it:

Reduce Your Monthly Bills By $84

Saving $1,000 sounds pretty daunting, but saving $84 sounds doable.

The good news is that because there are 12 months in a year, you only need to save $84 a month to hit your goal ($1,000/12=$83.33 which I rounded up to an even $84).

If you can find one bill of at least $84 a month that you can get rid of, congratulations! You’ll save $1,000 over the next year. Chances are that you’ll need more of a mix and match strategy: $10 here, $30 there, etc.

The nice thing is that you can do this in one focused weekend of research and phone calls. Here’s the step-by-step strategy:

Step One: List All Your Regular Bills

Consult your bank or credit card statements. You can also use a free service like Mint or Personal Capital.

Look for those insidious automatic payments that are happening in the background without you thinking about them

Step Two: Eliminate, Switch, or Negotiate

This part is the actual work. You need to research your options and figure out what opportunities are available to you to save money. In general, you should be thinking about finding savings from one of three methods:

Eliminate: Cancel necessary or rarely used services
Switch: Find a competitor who will do it for less
Negotiate: Ask for a discount or find work with the provider to find a cheaper alternative.

Let’s take a deeper look at each strategy:

Eliminate

Unnecessary services

Companies love recurring subscriptions because they know that once you sign up, you are unlikely to cancel.

There’s a good chance that you are currently paying for a recurring subscription that you don’t even use anymore. There’s an even better chance that you have a streaming service or two that you pay for every month, but barely use.

It pays to be aggressive here. signing back up for a premium service is easy, it’s having the guts to pull the plug that’s difficult.

Duplicate services

I’ll admit something embarrassing: the first time I did this exercise I realized that I was getting roadside service from three separate sources:

I was paying an additional fee for roadside assistance from my car insurance
I had a paid AAA membership
I had roadside assistance through my credit card

The credit card usually carried an annual fee, but it was waived the first year, so at least I wasn’t paying for that one too. Still, I felt so ashamed that I din’t even realize that I was paying for duplicate services.

Media subscriptions can also count as duplicate services. You may think you need Disney+, Netflix, Amazon Prime, Hulu, and HBO, but could you get by with just one or two of them? Streaming gets a lot cheaper when you pay one fee for unlimited entertainment as opposed to multiple fees for every single thing you want to watch.

Switch

Internet, cable, phone service, and car insurance are all great candidates here.

Internet

You may not have more than one internet provider in your area (if you don’t, see the section on negotiating below), but if you do, it can be a way to provide some easy savings.

Internet providers often charge special low rates to new customers, these rates can easily come in at $10-$20 cheaper than the regular rates. I have a friend who lives in an area with two providers and he switches between them once a year. He has never paid full price for internet.

Phone service

This is a great opportunity for a lot of people. Pretty much everyone has a phone plan and most people are paying way too much.

I used to be with one of the big phone companies until I realized that I could cut my bill in half by switching to a smaller provider. So I switched from AT&T to Straight Talk, then from Straight Talk to Cricket, and finally from Cricket to Red Pocket. My coverage is outstanding and my bill has kept getting cheaper and cheaper. I’m paying half of what I used to with AT&T.

You’ll have to do a little research to find out what companies are available to you, but the savings are worth it.

Car insurance

You have a couple of options here.

The first is to call around to different providers to get quotes and find the company that gives you the best rate.

The other is to find an independent insurance agent who will hunt for the best deal for you.

Either way, if shopping around for car insurance isn’t something you do regularly, you have a good chance of finding some real savings doing this.

Negotiate

Ask for a discount

This can actually work. In fact, I’ve used this strategy successfully multiple times and know others who have done it as well.

Call up a provider and let them know that you are looking to save money. You may need to turn down a sales pitch for a more expensive service and you might need to talk to a manager or customer retention, but there is a decent chance that you will get your bill lowered.

The best way is to just ask outright if you can have a discount. I did this with my internet service and after one awkward phone call came away with a $10/month discount.

Even if you fail, you still have a fallback:

Reduce your current plan

“If you can’t give me a discount, what can you do to help me save money?”

While no company wants to see you downgrade, they would much rather offer you a cheaper plan than risk losing you as a customer.

In many cases you won’t even notice the difference between your current plan and the cheaper one. In the instances where you do, it’s usually not that bad. And remember, anything you do during this exercise is extremely easy to undo.

If you are unable to save $1,000 with this method, you can at least take solace in the fact that your lifestyle is already pretty frugal and that you might have more success by focusing on building your income.

If it becomes clear during step one that your bills are bloated beyond reasonable boundaries, you can shoot for $168 in monthly savings, which would save you $2,000 a year.

The nice thing is that the work can be contained to a short stretch of focused effort on your part. After that you can just sit back and let the savings keep rolling in.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.