How to Negotiate Your Bills During Financial Hard Times?
COVID-19 has led to job and income loss at levels not seen since the Great Depression in the 1930s. A recent study showed that nearly 24% of those polled said they had lost their job due to the pandemic and are currently having trouble finding similar jobs to apply to in order to recuperate their income.
If you’re one of the millions of people struggling to make ends meet right now, there are a few ways that you can work to alleviate financial stress. Learning how to negotiate your bills and reduce your expenses are two of the most efficient ways to reduce financial stress, and here’s how to go about doing it.
Make a List of Expenses, Then Start Reducing
If you haven’t already done so, make a list of all of your monthly bills and expenses. It’s helpful to see the numbers together so that you can gain a more concise snapshot of what your financial situation looks like.
Then, rank the bills from the most burdensome to the easiest to pay off. Usually, bills with interest rates such as credit card bills, mortgage loans, and auto loans are the most important to pay off, but you obviously also need to prioritize paying utilities so that you can keep the lights on.
Once you see how much you owe in bills and can compare that to your income vs. your other expenses, it’s time to find ways to reduce expenses. It’s helpful to download a budgeting app that makes it easy to see where your money is going and allocate it to different things. Try also to reduce your subscription spending and learn how to save money on your monthly grocery bill.
Call Your Providers
Once you have a list of the bills that you need to pay each month, begin contacting your providers. Usually, the easiest bills to negotiate are cable bills and auto insurance, but it’s worth contacting every single provider as most are offering deals and leniency periods during the pandemic.
We’d suggest simply starting with this argument and inquiring about what their policies are during this tough time. We’ve compiled a list of the banks that are offering credit card relief during the pandemic as a starting point. Reducing your credit card bill can alleviate a lot of stress and free up cash to put towards other bills.
Learn How to Negotiate Bills
This usually works best if you go into the situation with a clear plan of what you need and how you plan to make that work. If, for example, you need to reduce your rent by a few hundred dollars per month, don’t simply ask your landlord if that is possible. Instead, tell them about your situation briefly, give them a set number that you are able to pay, and propose a few ways in which you can make that money up later.
For providers that exist in a pretty competitive market (such as phone providers, cable companies, and auto insurance), you might do your research online beforehand. See if others have had any luck reducing their bills or not. If they haven’t, then head into negotiations with a different attitude. Tell them that you’ve found a better deal elsewhere and ask them what the process might be for canceling your account. More often than not, they’ll work with you to get you the price you need (or at least close to it).
Ask for an “Accommodation”
For bigger accounts such as credit cards, financial experts spoke to CNBC and noted that the magic word to use is “accommodation.” Ask for an “accommodation” with your credit card account given the financial situation you’re in due to the pandemic.
However you decide to negotiate with your providers, it’s important that you at least try. It can be daunting and difficult to muster up the courage to negotiate (hello other introverts!), but it’s well worth it. And, it’s a far better option than simply missing a payment, as that can hurt your financial situation more in the long run.
One of the easiest ways to negotiate your bills is to combine services. If, for example, you currently have home insurance and car insurance with two separate companies, contact both of them to see if they offer combined auto and home insurance. Not only is this often cheaper, but it’s often easier to negotiate in the future as well if you need to lower payments.
Bundled cable, phone, and internet services also tend to be cheaper than paying a cellphone bill separately from your internet bill each month. If you don’t mind switching providers, it might be a good time to switch to a different provider offering a great deal for new customers. Tell them you’re looking for a specific type of bundle and they’ll likely give you a great introductory price.
Ask to Lower Interest Rates
This is the probably one of the most difficult to accomplish, but it’s possible if you’ve been a customer with a specific credit card company for a while. If you’re a loyal Capital One user, for example, and your credit card comes with a 15% interest rate, it’s worth contacting them and asking for an interest rate reduction.
Reducing the interest rate by just two to three points can make quite a bit of difference, and it’ll allow you to save more of your money each mony to put towards other bills and financial obligations. Before you call, prepare to have some talking points ready. Mention any positive points about you as a user. This includes on-time payments or a low credit utilization rate.
A Cheese Debit Card Can Help with Financial Stress
If you’re still struggling to find a way to reduce your expenses and pay your bills, it helps to take a look at how you’re spending your money. In this context, we’re talking specifically about what kind of card you’re spending with. If it’s not a card optimized to earn you cashback then you’re missing out.
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