Hidden Costs

One of my new year's resolutions was to simplify.  Sounds easy until you actually have the time to analyze and dissect all areas of your life.  Then you realize just how complicated and intertwined some things are.  When you cut back or eliminate one thing you suddenly discover its ripple effect on other areas.  Some of these effects are positive, some are negative.  Suddenly, just the process of simplifying isn't quite so, well - simple.

For example, one of the areas of our life that had become quite complicated was our finances.  To be transparent, over the last many years, with my being bivocational and Scott coaching, we did not pay close of attention to expenses/bills as we should have.  We paid our bills, trusting that they were accurate and that we paying for services, for the most part, that we thought we actually used.  But we didn't have the time nor the energy to really look at our statements to see what we were really being charged and why.  So at the beginning of the year, I began to really look at the details of each bill and expense we had.  Boy, was I surprised!

As I began analyzing the details of the charges, I discovered fees for services I don't ever recall ordering.  I also discovered fees for things we had ordered in the past had doubled, even tripled from the original time we ordered the services (cable, phone, etc...)  Others were fees for services we never ordered but apparently had been automatically added to our account for 'free' but with the contigency we had to call them after a certain number of months to cancel or we'd be charged.  To receive the service required no action on our part!  How nice of them! 

As I began adding up all of these 'hidden costs' I discovered that we had almost $200 in services we didn't use or need.  I knew we had a few things out there that we needed to cancel, but I certainly didn't realize just how much all of these added up!  Our inattention to these details over the last year especially had cost us - A LOT!     

Next, Scott and I analyzed every charge and fee.  If we discovered we were paying for a service we either didn't want or no longer needed, we called and canceled it.  Once we eliminated the obsolete, we turned our attention to other expenses.  For example, we noted that our introductory price for our cable/phone/internet had run out - the charge had almost doubled from the introductory price.  So I called our cable company and spoke to a representative on how we, loyal customers since 1993, could cut the costs of our services with them.  (I was really hoping they would cut a deal with me to keep the current service levels we had since we had been customers for so long, but they didn't.  Hey, it was worth a shot to ask!)  Although the customer service representative did not offer us a special deal, she did  present to me some cost cutting suggestions.  We tweaked a few things with our service and ended up with basically the same services (just minus a few email addresses and some premiere movie channels which we never watched). Our new monthly charges will fall pretty close to the introductory price we had been paying all along.   

Another strategy that helped us to simplify our finances was to get our financial data in some kind of money management program.  For years, we had used a budget spreadsheet that I created for our personal finances. But over the years, with the changing expenses of a growing family, our HSA, retirement, taxes,  and now a child in college, the limited functionality of my simple budget database was just not enough.  For us, the perfect solution to organizing our finances electronically was Quicken.  We use it to track ALL of our financial transactions - checking, savings, mortgage, loans, medical, credit cards, bills, tax information, Mathew's college expenses, HSA, charitable contributions, assets, and retirement. It was a huge task in getting everything set up in Quicken, but OH, how NICE to have everything at the click of a button instead of having to pull it out of a file cabinet! In addition, it had so many built in features that I had done by hand because Excel just didn't have the functionality needed.  We had actually set up our finances in Quicken last summer, so having everything already set up really helped us at the beginning of this year as we began to analyze our finances.

From this experience I learned quite a few things.  Here's some of the lessons I learned:
1.  Always check the details of your billing.  If there is a charge you don't understand, call and ask for an explanation.
2.  If you have signed up for a service under special introductory pricing, know when the introductory price ends.  Once it ends, call the service provider to see if they can offer you a similar deal to keep your business.  If not, see if there are other options for the services that will keep the cost in check.  Once the introductory deal runs out, the price may skyrocket.
3.  If you no longer use a service, don't let it linger.  Cancel it immediately.  Even $10 a month adds up over time.
4.  Being tired or too busy is understandable. However, for your family's financial sake, keep track of the details of all bills and expenses.  If you don't, it's like throwing money away!
5.  Be careful on services offered for 'free' for x number of months.  You usually have to call to cancel that service.  Company's count on the fact that you will forget so they will begin charging once the free time period runs out. 
6.  Get your financial data organized - whether is just on paper or in a money management program.  Being organized will help you stay on top of your finances.
7.  READ all of the messages on your bill, especially those in the detail section.  This is usually where information about changes in fees or other changes affecting your future charges are located.

And last but not least,

Sometimes it just pays to do a little financial house cleaning!

In His Love, Cathy