How to save thousands by negotiating your utility bills

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How to save thousands by negotiating your utility bills

They come every month, and they’re slowly sucking your budget dry: monthly bills. Whether for cable, your cell phone, electricity, or other utilities, these recurring bills can cost you thousands of dollars per year. And utility scams can make the problem even worse. But here’s the good news—your monthly bills are almost always negotiable. We’ll show you how.

Lowering your cell phone bill

Cell phone bills are always negotiable. Each carrier has a wide variety of plans, and you can upgrade or downgrade between different price points. If that doesn’t offer the savings you need, you can also easily switch providers, even if you’ve recently signed a two-year contract. In fact, every major cellphone company has a deal to cover your switching costs. Here’s what the big four say about switching:

Verizon

"Switch to Verizon and we'll give you up to $650 to get you out of your old contract when you trade in your phone."

T-Mobile

"We'll pay off your phone via prepaid card when you switch to T-Mobile and get a new phone."

Sprint

"We'll even cover your switching fees up to $650 per line."

AT&T;

"Get up to $650 in credits per line to help you switch to AT&T.;"

These offers mean you can credibly threaten to leave your carrier—and they know this. First, you should ask for a lower price on your monthly bill. You don’t need to justify it—just say the plan is too expensive and you want to find a way to save some money.

They might offer to move you to a cheaper plan. Depending on your usage patterns, this could be a good deal. But if you’re still not happy with the discount, you should note the promotions offered by other carriers. Tell them if they can’t match their offers that you’ll switch.

You’ll likely be transferred to a customer retention department. Their job is to keep you from switching, and this is where you can get the best deal. Remember, rival companies will cover your switching costs and you can keep your existing number. You have the power in this negotiation. If they won’t give you a deal, you can and should move to another, cheaper, carrier.

Also, for iPhone users: Take a survey of your friends and see how many are using Androids. If the answer is zero or close to it — meaning almost everyone you text with is on iPhone — you can probably cancel your SMS plan and save about $20 per month. All those blue iMessages that you text are free. SMS fees only apply to the green ones.

Cable

Cable companies are always coming out with new promotions, then jacking up your rates when you’re not looking. One Comcast customer reported his rates doubling from $55 the in the first year of service to $112 by the beginning of his third year of service. Paying twice as much outside the promotional period is all too common. With practices like this. it’s not much of an exaggeration to say that their business model is built on making money off consumers too lazy to negotiate a better deal. Don’t fall for this.

Look at the introductory offers from your cable company and any local competitors you may have. Armed with that information, you can first ask for a discount, and then threaten to cancel your service if necessary. Because the cable company has already installed the infrastructure to bring you cable, it costs them next to nothing to provide you with service.

In the past, cable providers had more leverage because it was unimaginable that most Americans would cancel their plans. But now you can credibly threaten to cut the cord. Services like HBO Go, Netflix, Hulu, and Amazon Prime Video — not to mention YouTube -- mean that you can get the best of cable on your phone or computer, on your own schedule. If they offer you a better deal, be sure to get specifics, like how long you’ll keep the lower rate, what channels will be included, etc.

Internet

Negotiating with internet companies and cable companies is similar—in fact, many people get their cable and internet from the same company. If you have your cable and internet bundled together, threatening to move to another company will result in an even bigger loss for the cable company. This means they have even more incentive to keep your business.

If you get internet alone, many of the same negotiating principles still apply. Find out the offers from local rivals, and push for a discount or a match of a rival company’s offer. Researching discounts and promotional offers is extremely important if you’re one of the many Americans who does not live in a competitive market. These promotional offers might be your only chance to get real savings on your bill.

Electricity

In "energy choice" states, you can choose between multiple electricity providers. Energy choice is available to some or all residents of Connecticut, Delaware, Washington D.C., Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Texas. Check here for more information, and whether energy choice is available for your business.

If you live in one of these markets, you can compare rates between providers and threaten to switch. As with cable, contracts and promotional rates differ, but some electricity providers will hike your bill after a low promotional rate. But energy choice means just that--the option to switch to a different, cheaper, provider. If you’re in an energy choice state, don’t hesitate to move to a more affordable utility.

Even if the electricity company won’t directly give you a discount on your power usage, you can ask them for help on lowering your bill. In California, customers of PG&E; can use an app called Ohmconnect to save money on their power usage. It actually pays you to use less power. Other utility companies may have similar programs or incentives. For instance some energy companies will give you a $100 rebate for using a smart thermostat like Nest. Some will even send you a Nest for free—a $250 value. See here for details, and ask your energy provider if they’ll work with you.

Beyond negotiations, you can lower your monthly electricity bill by installing solar panels. Around 40 states allow consumers to sell their self-generated electricity back to the grid.

Don’t psych yourself out

Asking for a discount can be tough if you’re not a natural negotiator. But you don’t need to be embarrassed or shy. These call center reps have seen everything. They’ve had customers scream at them. They’ve had people ramble incoherently. And they’ve certainly had people like you politely ask for a deal. If you feel bad about asking for a discount for yourself, imagine that you are asking for a discount for a parent or loved one. If saving $240 a year for yourself can’t motivate you, think about saving $240 a year to buy something special for someone you care about.

A little bit of effort can save you hundreds

On cable or internet it is common to save $50 a month with just a little negotiation. That’s $600 a year. Even if it takes you 2 hours of work to get those savings—and it will probably take a lot less—that’s like being paid $300 an hour. Likewise, saving $20 a month on your cellphone bill might not seem like much, but that’s $240 a year. Negotiating your different bills might seem intimidating, but given how much you can save, it’s totally worth the effort.