Stop Overspending on These 4 Things
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If you want to stop overspending, you might already be mindful of how much you spend on entertainment, clothes, and recreation. But there are other expenses that can also strain your budget.
So whether you’re trying to improve your budget or keep more of your hard-earned cash, here are four areas where you might need to stop overspending.
1. Insurance premiums
Insurance premiums can vary widely by company. So it’s important to know your options and shop around. For this reason, getting three or four online quotes is a great way to stop overspending – potentially saving hundreds every year.
This is especially true for auto insurance. Yet, according to one report, “about 40% of people buying car insurance don’t shop around.”
“Not” shopping around doesn’t only apply to auto insurance, though. Some people don’t shop around for home insurance either – meaning they end up spending more than necessary on premiums every month.
Additionally, some people will sign up with a company and stay with this company forever.
Now, there’s nothing inherently wrong with this—and loyalty can pay off. But from time to time, it doesn’t hurt to contact other providers to see what they can offer.
Just because an insurance company offers the lowest rate today doesn’t mean that they’ll offer the lowest rate in five years. And if another company provides cheaper coverage, you can ask your current provider to match their quote.
Also, take advantage of discounts available to you. For example, if you have more than one policy with the same company you might qualify for a multi-policy discount.
2. Subscription services
Another area to stop overspending: subscription services. Now, I’m not suggesting canceling your subscription services. This isn’t realistic.
What I will suggest, though, is periodically taking inventory of your monthly subscriptions to make sure you’re not unnecessarily paying for stuff.
Nowadays, you can get a subscription for just about anything – makeup, perfume, clothes, and the list goes on and on.
And yes, these services are convenient since these companies will deliver merchandise directly to your door. Still, you have to be careful.
Over time, your interest in a particular item could wane or you might use less of a product. However, if you’re accustomed to paying for the service, you might not think to cancel. Or, you might not realize how a service impacts your budget.
Five dollars here and $10 there might not seem like a lot—but it adds up quickly. So periodically evaluate your services and cancel the ones you don’t use.
The company might have a non-subscription option, or you might find another company offering the same product without a monthly subscription.
3. Financing
The same way some people don’t comparison shop when buying insurance, some people don’t rate shop when financing a home or car.
Now I realize that comparison shopping is tedious because you’re contacting multiple lenders. But even though it’s an extra step, it can pay off in a big way and help you stop overspending in this area.. You’re able to compare rates and fees, which saves you money.
I also understand that some people are concerned about multiple inquiries on their credit report, which of course can drive down credit scores.
But one thing to keep in mind is that credit scoring models are designed to recognize rate shopping behavior. So multiple inquiries that take place within a certain window will only count as one inquiry.
If you reach out to three mortgage lenders within this window, your credit score doesn’t take a big ding.
This window varies, ranging between 14 and 45 days. It depends on the credit scoring model a lender uses.
Now obviously, there’s no way to know which scoring model a lender uses unless you ask. So my recommendation—to be on the safe side—is to complete all of your inquiries within 14 days.
4. Medical bills
Even if you have health insurance, a test, procedure, injury, or illness can result in a medical bill. And when some people receive a bill they do one of two things. They either pay the bill (if they have the money), or they’ll set up a payment arrangement.
Before taking either step, though, it’s important to comb through every single line of your itemized bill.
I’ve heard many stories of people receiving medical bills and finding duplicate or unfamiliar charges. And when they dispute a charge, the medical facility acknowledges their error and removes it.
So my point is, never assume that a medical bill is accurate. Billing errors are common and they cost many people hundreds, if not thousands, of dollars every year.
Also, medical bills are negotiable. So if you can’t afford a bill, call the medical facility and explain your hardship. Some facilities don’t volunteer information about relief plans, but they’ll explain your options if you ask.