5 Monthly Expenses You’re Probably Paying Too Much For

We all have bills to pay—that’s just part of life. At the same time, that doesn’t mean you have to overpay, and chances are, there are indeed a number of expenses that you’re paying too much for every month. Here’s how to save on five of the most common wallet-draining culprits.

1. FIND A CHEAPER CELL PHONE PLAN.

If you’re paying $100 each month for cell phone service, you’re doing it wrong. Even if you’re paying $50, you’re paying more than a lot of savvy cell phone shoppers are.

From Ting to Republic Wireless to Virgin Mobile, there are a number of discount cell phone carriers that offer the same service for much, much less. Ting, for example, uses the Sprint network and only charges you for the data, minutes, and texts you use, and their average customer’s monthly bill is a mere $23. You can use their handy savings calculator to get a sense of how much you would save by switching to Ting. Republic Wireless, meanwhile, offers similarly priced plans with unlimited talk and text.

Even the larger carriers are now embracing less expensive options—but all of the options can be overwhelming. To navigate the confusion, use an online tool like WhistleOut to compare cheap plans.

2. HAGGLE WITH YOUR INTERNET PROVIDER.

Cable and Internet companies notoriously overcharge customers, and talking to their customer service can be a pain (remember the Comcast call that went viral?). If you’re up for it, though, a little haggling can nab you a lower monthly rate.

Over time, cable and Internet companies jack up plan prices for their regular customers. It’ll start with a few bucks a month, then before you know it, you’re paying twice as much for the same service. This is when you should give them a call and negotiate a lower rate. Research their promotional prices and the promotional prices of competitors—most plans start at $40 to $50. Then call and politely insist they give you the same rate they’re offering new customers. If that’s too much work, there’s a company called BillCutterz that’ll negotiate a better rate on your behalf. Of course, they want a cut of your savings, though.

Most Internet providers now charge you a rental fee for the privilege of using their modem. This can range from $5 to $10 a month, and that adds up over time. To get around this fee, simply buy your own modem and send theirs back to them. Here’s what PC World recommends:

Before you hit the streets to start shopping for a modem, check your ISP’s terms regarding the use of customer-owned modems and see if it supplies a list of recommended or approved models. Many ISPs (like Comcast, Time Warner, Cox, and AT&T) even offer this information on their websites. Some give just a simple list, while others recommend specific models for the different speed packages they offer.

3. SHOP AROUND FOR CAR INSURANCE.

If you don’t shop around for auto insurance, chances are, you’re being price optimized. Price optimization is a tactic insurance carriers use to target their most loyal customers and charge them higher rates.

To do this, they mine and analyze data about your shopping habits. They review how often you buy new electronics, for example. They pay attention to how loyal you are to other companies, how tolerant you are of price hikes, and how likely you are to shop around for cheaper options. From there, they use algorithms to calculate how much they can increase your price before you’ll end your policy and look somewhere else.

The National Association of Insurance Commissioners explains how it works in a bit more detail [PDF]. In a nutshell, it’s a sneaky practice, and the Consumer Federation of America is working to prohibit it. 

In the meantime, it’s easy enough to avoid getting price optimized: Simply shop around. Get a few quotes from other car insurance carriers, call and ask for a better deal, or simply switch carriers completely. This shows insurance companies you’re a savvy shopper and you won’t stand for being price optimized.

4. GET AROUND YOUR CREDIT CARD INTEREST.

If you have credit card debt, it’s hard to avoid paying interest altogether, but there are some ways to at least reduce the amount you pay. For starters, you can try simply calling and asking for a lower rate. CreditCards.com offers a script to help you do just that. 

Some debtors avoid interest by transferring their balance to a credit card with a lower interest rate. This can save you hundreds or even thousands in interest over time, but there are a few things to keep in mind with this method. For one, many credit cards charge pricey balance transfer fees, so you want to read the fine print.

Thomas Nitzsche of ClearPoint Credit Counseling warns of other dangers with this method. “There is no guarantee [consumers] will be issued a line of credit high enough to take on the full balance," he says. "In this case, the new creditor may accept up to the credit limit, but leave the remaining amount on the previous card. This is a problem for consumers in a couple of ways. First, it maxes out the available credit on the new card, which isn’t good for their credit score. Second, it means they now have two monthly payments to make instead of just one.”

If transferring the balance maxes out the new card, this can also negatively affect your credit, Nitzsche explains. Call and ask for a lower rate first, and if you opt for the balance transfer method, proceed with caution.

5. SHRINK YOUR ELECTRIC BILL.

According to the U.S. Energy Information Administration's latest release, which documented rates in 2013, the average electric bill in the U.S. is $110.23. With a few simple tweaks, it’s easy enough to get that number down.

For one, pay attention to your electric company’s peak hours. These are the times in which everyone is using the electric grid, so prices are typically higher. In most cases, off-peak hours are nights (after 8 p.m.) and weekends, so it pays to run your dishwasher, dryer, and other appliances during these hours, when the cost is lower.

Another easy change you can make is switching your standard incandescent light bulbs for energy efficient ones. Most people have already hopped on this bandwagon, but if you haven’t, look for Energy Star certified compact fluorescent bulbs.

You can also use a tool like Kill A Watt to measure the electricity usage of various items in your home. Find out which appliances are using the most energy, then focus your energy-saving efforts there. For example, if it’s your computer that’s drawing a lot of power, perhaps you should tweak its energy settings to automatically shut off during certain hours of the day. The Kill A Watt is $25 well-spent, but many library branches also make the tool available to patrons.

The great thing about taking the time to lower your monthly bills is that your savings are ongoing. You continue to pay less month after month, and that can free up more room in your budget. Best of all, it only takes a few minutes and some small adjustments to reduce your monthly bills and save some cash.