The Average Household Is Overpaying on These Bills — Are You?
Most Americans feel the impact of increasingly expensive bills, but not everyone may realize how much of their monthly spending is high because they haven’t revisited old bills in years. Experts say households are routinely paying more annually than necessary.
However, many of these costs can be reduced surprisingly quickly with a few phone calls and a closer look at recurring charges. Here are the biggest culprits.
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Auto Insurance
Auto insurance is one of the clearest examples of “set it and forget it” spending. Cody Schuiteboer, president and CEO of Best Interest Financial, said households that haven’t re-shopped auto policies in two years may overpay by 15% to 25%, or roughly $270 to $450 annually on an average premium.
If you’re staying loyal to an insurance company, added Russell Moran, owner at Russell Moran Enterprises, Inc., urged consumers, it won't benefit you. “They are not loyal to you. You have to shop to find the best deal.”
Cellphone and Internet Bills
Wireless plans and internet bills are another category where households often overpay without realizing it.
Kenneth Vern Bolam, president and founder at First Financial, said older wireless bills are “usually $20 to $40 more per line than newer unlimited plans.”
Many consumers are paying for premium data plans they barely use, Moran added. He personally was able to spot a line item for a 5GB plan his family didn’t use and switch to a value plan and save money instantly.
Since most companies are already set up with retention departments on hand to offer a discount for threatening to quit, a simple call can reduce your monthly bills by 20% to 40% on the spot, Schuiteboer said.
Subscription Creep
Streaming services, delivery memberships and forgotten recurring charges can quickly add up. Moran broke down what he calls the “subscription creep” effect, pointing out: “One Netflix at $20, DoorDash at $15, Uber Eats at $15, Hulu at $20, Disney+ at $25, Paramount+ at $20 — they seem harmless. Now you’re paying $115, and how often do you use or need them?”
The average American spends $219 per month on subscriptions, Schuiteboer said, yet estimates spending only $86.
“Autopay is a killer,” Moran said. “Set it and forget it at its finest.”
Credit Card Interest and Other ‘Fixed’ Bills
Many consumers wrongly assume bills like medical costs, property taxes and credit card APRs are nonnegotiable.
Bolam explained that big savings can result “from renegotiating either insurance or restructuring high-rate interest credit card debt.”
Consumers with strong payment histories can often negotiate lower interest rates directly with credit card companies, Moran added. “They will throw you a bone and lower to 15%,” he said, though he added that a 0% balance transfer offer may sometimes be the smarter move.
Medical bills may also have surprising flexibility. Moran recalled receiving a $1,700 lab bill that dropped to just $70 after explaining they were cash-pay patients.
Property tax appeals are another overlooked savings opportunity, Schuiteboer said. “Assessment appeals are fairly successful in most jurisdictions.”
Inertia, Not Inflation
These experts agree that people are overpaying more because of inertia than inflation. Reviewing recurring bills once or twice a year, comparing competitors and making a few negotiation calls could free up hundreds or even thousands of dollars annually without changing your lifestyle.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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