Thursday, June 12, 2014
Unbundle For Summer Savings!
Brought to you by Destinations Credit Union
One of the most rewarding places to save money every month is in recurring expenses. They're the easiest to budget for because they are the most consistent. You might not be able to do much about your electric, gas, or water bills. You can, though, cut your bills for TV service, Internet access and home phone service just by picking up the phone.
There is only one media company that doesn't push bundled service: Time-Warner. Comcast will soon buy them out and they still use a hard sell for their bundled services. With AT&T's proposed buyout of DirectTV, more Americans will be able to get their TV, Internet, and phone service all from the same company. So-called "triple play" plans offer one-bill convenience and some savings over the individual price of all three. Service providers love these plans because it's an easy way to sell existing products. But are they better for consumers?
There are three questions you can ask yourself to decide whether you want to get all three services from the same provider. Are you better off breaking up with the bundle? Let's take a look.
1) Do you need all three services?
This is the easiest way to save money on the cable bill. No matter the savings for putting all three services together, canceling one of them will lower the cost of your bill. If you can do without one of these services, you can start unbundling right away.
A recent study by the Centers for Disease Control and Prevention points out that 40% of American homes have only wireless phones. Think about the last time you used your land line for something that wasn't a telemarketer. Popular voice-over-IP services, like Google Voice, can also provide free alternatives to land lines. If you can do without it, you will save money.
Likewise, television is something a lot of families are learning to do without. An over-the-air antenna can provide local news, sports, and live events. Services like Netflix and Amazon Instant can fill the entertainment void. Popular HBO shows like "Game of Thrones" aren't yet available online but some bars and restaurants hold watch parties so you can still get your fix.
Replacing high-speed Internet can be tricky. If you're relying on streaming video services for entertainment, you can't do without. Alternative plans, like DSL or mobile broadband, can be cheaper if your data usage is low. There's just not a great deal of competition among broadband Internet providers in most parts of the country.
2) Are you still in your promotional rate?
Cable companies came up with a brilliant plan several years ago. They would make short-term contracts at reasonable prices. After a year, the price would skyrocket. One of two things would happen. Either customers would shrug and continue paying their bill or they would call and complain. This call would give the cable company an opportunity to sell the customer on more expensive services. Either way, the company comes out on top.
If you haven't done so in a while, it might be time to check up on your cable bill. If it's not the rate you remember signing up for, you might have better luck negotiating a lower rate for individual services. Telling a company you'd like to drop some services will likely lead to a conversation about retention of you as a customer. You may get an offer of a new promotional rate. It's up to you whether that rate justifies the cost or not. Bear in mind, though, that you won't get what you don't ask for. A Consumer Reports study found that only 30% of cable bundle subscribers tried to negotiate a lower rate. Of that 30%, though, 90% got some accommodation.
If you're still under a promotional rate, you can still consider breaking up your bundle. You may have to pay a termination fee, and the rate you pay for other services will likely go up. It will still be cheaper in many instances to cancel an unnecessary service than to maintain it.
3) Can you get cheaper alternatives from other providers?
If you and your family can't live without the services bundled into your cable bill, investigate a few alternatives. Take a look at competitors and decide if you're getting the best deal. This is a two-step process.
Step one is to jot down the total amount you're paying for cable, Internet, and television. That's the target number in your comparison shopping. You don't need to figure out the cost of each individual service. You can keep these services "bundled" in your budget.
The second step is to research prices from competitors and plug them into your budget. Be sure to subtract what you would save from your bundle discount. The amount you can save by losing the land line and finding a cheaper TV option could shock you. You might find your net spending on these utilities drops as much as $60 per month.
Negotiating with cable companies is frustrating and time-consuming; keep focused on your reward. That $60 a month might not seem like much, but it could be a contributor to getting out of debt or the start of a savings plan. It's an extra $720 in your pocket each year, which is a great way to start saving. No strings attached!