Happy New Year! I hope you had a lovely holiday season and you are ready to kick start the new year with a bang.
To help you do just that, I have put together a month long financial boot camp, with two tips per week and a call to action. Together, we will review several aspects of your financial life to make sure you start the year in good shape. First, let’s have a look at your bills.
Are you paying too much?
I review my utility bills once a year to make sure I get the best deal. If you don’t, once your introductory offer ends, you are usually sent back to the rack rate, and zero discount. For example, I use O2 as a broadband provider. They are not the cheapest, but they are the best for my needs. They provide my flat with unlimited broadbad and a line rental for £28. Except that in five years of doing business with O2 (now Sky Broadband) I have never paid that rate.
Why? Because once a year I call them, tell them Talk Talk or Virgin has a better offer, and ask to be maintained on the intro offer. Every. Single. Year. And they happily agree to that, since it is much cheaper to keep a customer than to get a new one.
My broadband bill at the moment is £17.75. I could go through the hassle of moving to Talk Talk and save another couple of pounds a month, but they don’t come near O2 for customer service, and after a year I would have to move back. With O2, I can play on my seniority. Last year, the customer service rep told me “oh, you have been with us forever!”. They want to keep me happy even more.
Checking all your bills
The same applies to all other bills. I check the electric providers (don’t have gas) using comparison sites, and generally end up switching, because it is fairly easy with little paperwork.
Using January as your starting point is great because every new year, you will automatically think about it and look for a better deal. If you are tied to your current contract, make a date in your calendar one month before it expires, to look for a better deal and make the switch.
If you are a new customer, you should check Quidco on top of that, to see if you are eligible for some cash back. For example, an electric switch is usually paid £20, and a dual switch £30. That is almost my monthly bill, so I get a free month, a lower rate for the following month, and since the companies are happy to welcome you as a new customer, they make the switch painless, with no service interruption.
At the moment, I am with EDF Price Promise, which did not have the lowest rate by £15 or so BUT
– I was already with them so zero hassle
– They let you know when another provider is £1/week cheaper than they are, so you can switch
– That rate has no early penalty if you leave, which the cheaper one had so you are stuck there for a year if prices drop.
For now, this is what suits my needs best. We each have different consumption patterns and budgets, so look for the best deal for YOU.
On top of that, make sure you are using as little energy as possible, to keep your bills as low as possible. Some small changes around the house such as LED lights or low-flow toilets and showers won’t affect your quality of life while helping you reduce your monthly bills.
Getting a further discount
Most providers will do an additional discount if you opt for paperless billing and pay via Direct Debit. Both options will make your life much easier so there is nothing to think about. You can generally choose the date for direct debit, shortly after you get paid will reduce the risks of overdrawing your account.
How to talk to your utility company
It is pretty simple. Be nice and polite, call customer service and explain that (competitor) has a lower rate for (service). Do your homework before and have it written down. Then tell them that as your contract is ending soon, your would like to know if they can make you a better offer, otherwise you would switch. That is when they say “of course! we can match that price” and you are good to go. Sometimes, they will transfer you to retentions, which is the service in charge of keeping customers, and has more wiggle room to give you a discount. Once I talked to someone who told me it was not possible, I just hung up and called back. I guess it was his first week. Try again if you do not get satisfaction, or switch.
Action for the week
1. List down all your bills from your last bank statement or look through your mail. You can have any or all of the following
2. Compare the rates. Go to Uswitch or GoCompare and compare your services. Then, go to Quidco and check for additional cash back. Also check for bundles, for example, O2 offers £5 off broadband if you have a O2 mobile. Sky has cable + broadband bundles, gas and electric with one company is usually cheaper.
3. Call your actual providers and ask for a discount. Otherwise, move on with the switch.
4. Drop me a line and let me know how much you saved 🙂
It may not be much, when I call O2 and they keep my £17.75 rate instead of £28, I only save £10.25. But that is over £120 a year, just for a 10 minute phone call. Compare that to your hourly rate and I am sure it is a very decent pay day.
This post was featured on the Carnival of Financial Camaraderie, Your PF Pro, thank you!
Adam @ Money Bulldog says
Nice idea with the boot camp Pauline, looking forward to part 2 🙂
Thanks Adam, glad you like it.
Joe @ Budget Breakaway says
Reducing your utility bills is a great start to the new year; we’re tied into a Virgin broadband contract for the next 12months. We’re currently paying £16 per month but that shoots up to £28 soon 🙁
Looking forward to seeing some more in the financial bootcamp series!
I just called Sky and as a former O2 customer they had an offer at £5 a month for the next 12 months. £28 sounds expensive, sometimes the early termination fee is only £50 or so, which is worth it if you get a big discount from the new provider.
I’ve been with Virgin shortly and was happy with the service but they aren’t the cheapest ones around. Their fiber internet is super fast though, and they have usually a nice cash back offer with quidco.
[email protected] Banker says
All great ideas, Pauline. One thing that worked well for my wife and I was to put a timer on our water heater. Saved about $40 a month!
Wow that’s huge! You can take advantage of cheaper hours when you program your washing machine to run at night as well.
Skint in the City says
You’ve inspired me Pauline. I have next Tuesday (a random day in January, but so what?) pencilled in for a finance review – I will take inspiration from your checklist. Thank you!