Most consumers fall for marketing gimmicks without even realizing it. Retailers use tactics like purchase with no money down, 0% interest, and ‘sale-this weekend only’ to lure buyers into signing on the dotted line without giving the purchase any long-term thought.
Over time, many of these promotional periods and discounts will end, leaving you the consumer with larger payments and bill creep!
Many times when you walk out of a store, you’re feeling good! You may have found a bargain, gotten a special deal, and were able to save money…or so you thought!
Bill creep happens when one of your regular expenses unexpectedly increases. The cost may have gone up due to the introductory offer ending, the terms and conditions, or was simply because the retailer felt like increasing it!
You may experience bill creep in things that you need, like housing and groceries, but it also occurs in your wants. Sometimes it happens to the items you use every day and other times to the ones you don’t use at all!
As a result of financial automation, many people never review their spending or even check their statements. While this ensures their bill gets paid in full and on time, it also allows retailers to increase prices without these individuals even noticing!
One common reason people experience bill creep is that they tend to stick with their existing service providers. They may be loyal or are unwilling to go through the process of changing, despite being able to save large amounts of money!
However, when you make an effort to reduce and fight bill creep, you’ll put yourself in a better financial position. Your monthly expenses fall which could end up saving you hundreds or thousands of dollars!
For example, imagine you discover that one of your monthly bills has crept $20 higher. If you took 30 minutes to contact your service provider and lower it back to the original amount, then you’d save $240 per year.
Taking it one step further, what if you took these savings, invested them, and were able to earn a 10% rate of return? In 20 years, you’d have over $13,700 from reducing one bill!
Think about what would happen if you did the same thing with 4 or 5 other bills. Suddenly, you’d be in a position to build wealth, achieve financial freedom, and be able to live out your plans for the future faster!
Unfortunately, most people don’t track or review their spending, so they never notice bill creep. Instead of fighting it, they continue paying inflated amounts and delaying their dreams!
At the first sign of bill creep, you have several options. You could choose to do nothing while overpaying and wasting money or you could do something about it!
To fight bill creep, you first need to know which of your expenses are recurring costs and going up. Start by going through your bank statements, credit cards, and writing down the bills that you pay over and over. Some of them may appear on a monthly, quarterly, bi-annual, or even on an annual basis, too.
Next, review your list and determine if you have any duplicate items that you pay for. These are the products and services that are substitutes and provide roughly the same thing.
Streaming services are a common example of a duplicate. You may have found yourself not using one and eliminating it probably won’t affect your quality of life, but it will give you an easy win!
In my experience, it’s far more common for people to pay for services that they don’t even use. Oftentimes, they signed up during a promotion, used it a few times, then stopped, and completely forgot they were still getting billed for it! This happens to some people who sign up for subscription services, like instacart or UberEats.
If you’re paying for products or services that you don’t use, then it’s time to stop. This is a painless way for you to reduce your burn rate and save more money!
For the services you want to keep, consider how much of them you use and then downgrade where you can. For example, most people get surprised by how few TV channels they watch or how little cell phone data they use. By reducing them, they’ll stop overpaying and now have the ability to start saving every month!
Another way to fight bill creep and simplify your finances is to bundle your services together. Many companies offer discounts and savings when you have multiple services or policies with them.
For example, many banks offer reduced mortgage rates to their existing customers just as insurance companies give discounts for covering your home and auto. Most telecommunications companies give special deals and promotions when you bundle services together, too.
However, these promotional periods will unfortunately end at some point. To keep track of when they do, consider adding the date to your money calendar. This way, you’ll be able to prepare and negotiate your bill creep well in advance!
By now, you’ve eliminated the services you don’t use and reduced the cost of the ones that you do. But at some point, bill creep will come and you’ll want to negotiate it down.
To begin the negotiation process, call your current provider and simply ask for a lower rate. Most companies want to keep you as a customer and may be willing to work with you. Sometimes, they’ll offer you a different package or plan that will reduce your cost. However, if they don’t choose to lower your rates or are unable to, then try speaking with someone in the “Customer Retention Department’ who usually has more flexibility and options available for you.
If you’re still not satisfied with your savings, then it’s time to start comparison shopping. Look at the other providers, review the deal they offer, and determine how much you would save by switching. If you’re pleased with the amount, then go ahead and switch!
Most people don’t call and negotiate bill creep because it appears to be a time-consuming process. While it can be, it normally turns out to be one of the most effective and productive uses of your time!
Recently, I noticed my cable bill increased by $20 per month, so I called to get a better deal. Unfortunately, the company declined to lower my rate, so I switched to a competitor where I was able to save $40 each month. While this isn’t a large amount of money, it did only take about 30 minutes. As a result of this call, I was able to save $480 for the year which puts the value of my time at $960 per hour. I don’t know of many legal ways for most people to make that kind of money!
If you dread negotiations, another option is to hire a bill negotiation company. They’ll fight bill creep for you and typically you pay only when they’re successful.
A few companies that will help you fight bill creep are:
If you hire one of these companies, expect to pay about half the amount they’re able to save you. So, if they lower your monthly bill by $20, then you’ll likely pay $10 and save $10 each month – which is far better than saving nothing at all!
If you aren’t keeping a watchful eye on your bills, many of them will likely creep higher. After all, most companies are not going to remind you that the promotional period is ending or that their prices are going up. Instead, they’ll just raise their prices and hope that you don’t notice!
Get in the habit of tracking your expenses and monitoring your spending. When you do, you’ll be able to fight bill creep and stop paying more than you should!
Where are you fighting bill creep? Comment below.
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