With the current economic climate, it should be obvious that many people don’t have jobs, and the lucky few that are holding on likely won’t be seeing any raises this year.  Which is fine, because the market is deflating.  It is just important to make sure that your bills deflate with it.

Over the last year, I noticed that a significant amount of money was going out in recurring monthly services.  Things like cell phones, TV, insurance, and finances.  I was able to significantly reduce these expenses that add up to a large amount of money over time.

When one of my relatives had recently got a job as an insurance agent, I took the opportunity to call my car insurance company, with whom I have been a loyal customer with a nice record with for years, and discuss my payments.  I basically explained that I have been very profitable and loyal, but that I have another insurance agent over here offering a deal.  I  laid down a goal:  I wanted my monthly insurance for both cars and drivers, with comprehensive to cost under $100/month.  It wasn’t a short conversation, but by the time it was done, I didn’t compromise at all on my coverage and my monthly payment was reduced to $98/month.

Next on the list was cell phones.  Since my wife and I have cell phones, and it’s just the two of us, we got rid of our land line a long time ago, but our cell phone bill was very, very high.  The call was simple: I called my provider and said, I need my bill lowered.  We walked through our usage statistics over the last few months and rearranged our plan to save roughly $30/month.  Most providers will let you do this without extending your contract terms, and since special plans come and go all the time, it pays to be opportunistic.

Last thing to go was TV.  Since we already have internet access, and places like Hulu have been popping up with TV-on-demand, why pay twice for your favorite TV shows?  Some users have gone so far as to set up a MythTV box and stream shows directly to their TV from the internet… and why not?  As more and more services and more importantly, advertisers, are moving to TV-over-internet, it’s a pretty safe place to head.  Having the basic package for our provider it was still $55/month.  When we called to cancel, they were willing to chop off a significant percentage off the price, so even if you aren’t ready to switch yet, it’s still worth it to haggle.  They make no money if you walk away, and virtually no cost to keep you month after month.

As far as credit cards go,  an enormous amount of American families are encumbered and barely holding on.  The good news is, the banks are hurting for any cash right now and since Americans simply aren’t paying their bills, they are desperate.  If you are behind payments or barely holding on, call your bank up and shoot them a low-ball settlement offer.  If you have $1,000 maxed out credit card, offer $350 to settle.  It is more profitable to the bank to take your money and settle than to write you off to collections, and even worse for them if you file bankruptcy.  A settlement will also hit your credit report more nicely than a default.

The best thing to do in rough times is get creative.  Ignoring financial problems and letting them compound will cause much more pain.  After all, it is in the best interests of businesses to keep your business even if it means steep discounts, so let the recession work for you.

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