Last week I made a small windfall of savings by negotiating my utility bills. It came at the perfect time. I’ve had a significant increase this month in another essential expense. This has had an unhealthy impact on my budget. I needed to find ways to reduce my living expenses and lower my bills even further to keep on track with my financial goals for the year.
I thought it was going to be impossible to lower my bills as I generally live quite frugally. I mean, don’t get me wrong, there’s always room for improvement, but I wasn’t sure I could cover the full extent of the impact.
But then there was a knock at my door…
I was at home with my son. We were just preparing dinner. As I answered, two guys, stood outside, iPad in hand and lanyards containing identification around their necks. They were clearly door-to-door sales.
I normally stop door salespeople in their tracks and tell them I’m busy or not interested. They always arrive at bad times, don’t they?
But, I noticed they represented a local electricity provider. I immediately considered this was an opportunity to make some savings and this was a prime opportunity for negotiating my utility bills.
True enough, they were trying to get me to switch. They were offering a great deal on a combined electricity and internet broadband package.
It was a good deal for sure.
I’d almost be a fool to not switch. But I didn’t. I got a better deal. And I’m going to tell you what happened…
Negotiating my utility bills, the dance begins
The good thing about situations like this, particularly when you’re happy with your current provider, is that you are in the power position. They are in your home, asking for your business. You have the upper hand, so you can get people like this to work their backsides off for your business.
In fact, I’ll tell you this.
I didn’t let them in my home.
I made them stay outside, in the cold, while I talked to them. When they asked if they could come in I told them my son was really sick and it wasn’t wise.
My son did have a cold, but really wasn’t that bad.
I wanted them stood on the doorstep. Doing so would make them want to close the deal more quickly and move on. If they were sat down in the warmth and comfort of my home they would have all the time in the world.
In that situation, it would be me that would want to get them out of my home. I’ve worked with sales people, I’ve seen some of them intentionally manipulate that uncomfortable feeling to get a signature from a customer. I’ve seen customer’s sign a contract just to get a pushy sales rep out the door. I don’t like that. I don’t like being on either side of the fence in those situations. Being mindful that it’s a tactic sure does help you deal with it though.
Typically, this visit came with the usual pressure to sign up there and then.
Negotiations like this are always like a dance. I actually found that negotiating my utility bills was fun! Once you see them for what you are, they can be kind of fun to deal with. Particularly when you know you’re in the strongest position.
When you don’t get caught up in the sales tactics, or you see the sales tactics, you can disarm salespeople and cut to the chase. I want to lower my bills, I want to put money back in my pocket. These guys, they need my business. They get a commission. The power company will no doubt be making good money. I’m going to make them work for it.
It can be a lot of fun if you don’t allow yourself to be intimidated!
I knew this deal was good though, even without checking in on a few details. I’d already worked out the high-level savings in my head.
I wanted the savings. But, I couldn’t really be bothered with the paperwork. I certainly didn’t want to be bothered reconfiguring a new router for a new internet connection. Nor did I want to be setting up new automatic payments with my bank.
So, I made my excuses and asked them to come back the next day.
But first, I asked them to make sure they gave me their best deal which I would discuss with my partner when she got home. I took down the details and waved them goodbye.
No sooner had they left, I jumped online to compare rates and other deals that providers were offering. It didn’t take long. Sure enough, the deal they were offering was actually very good by comparison.
To give you a feel, they were offering me fibre broadband on a faster line than I currently had for $69 a month. I was, at the time, paying $91. Electricity usage charges were also reduced.
But, like I said, I couldn’t be bothered with the paperwork.
I was also happy with my current providers.
And, there was a kicker.
I wasn’t sure I’d be able to switch.
I had another provider attempt to have me switch about 9 months previously, and I agreed. These guys were offering cheaper rates and $300 credit on my account.
Unfortunately, I was unable to switch due to failing a credit check report.
I didn’t check out why it failed.
In fact, I still need to go check out what is going on there.
If I still had issues on my credit file, which was likely, because I’ve had too much on to go and investigate and clean it up, then I’d be effectively stuck with my current provider anyway.
But here’s the thing,
I’m not one to let something like that stand in the way of getting a better deal, and you shouldn’t either.
I picked up the phone and called both my electricity provider and my internet provider.
I got straight to the point,
“Hey, I’ve just had a couple of guys from one of your competitors turn up at my door offering me an awesome deal to switch. What better deal can you guys offer me to stay with you?”
Both providers immediately transferred me to their “customer retention” department. There was no holding on the phone. I was connected to someone within seconds. Within minutes I’d scored a better deal.
I got better rates on my electricity plus a connection to a loyalty scheme that earns me 50c per month on petrol/gas for my car.
They immediately upgraded my internet connection to a faster plan to match what the competitor was offering. This upgrade would have normally cost me an extra $30 a month. Then they offered me 6 months at $45 (that’s less than half what I was currently paying) plus 18 months at $69.
I also got 1 year’s access to Neon – which is like Netflix. This isn’t something I’d use, really. My partner and I don’t watch a great deal of TV. But, hey, take what you can!
I considered that a score.
But, I didn’t stop there!
No, I got a little cheekier.
Because, why not?
I’d inadvertently missed paying my bill the previous month. It’s the only bill I don’t have set to an automatic payment. I asked them to remove the late charge of $18.
They did it without question.
How to lower your bills
If you are struggling with your budgeting or you find that you’re living paycheck to paycheck then it might be that you need to cut your expenses.
Sometimes you’ll be impacted by an increase in expenses that are impossible to avoid. Such situations negatively impact your budget and you’re forced to find a way to make savings elsewhere. Other times you’ll just be looking to bolster efforts to help pay off debt fast. Cutting costs is an essential part of a strategy to pay off debt or boost your savings.
Negotiating your utility bills is a great way to lower your bills without first reducing your usage. Once you’ve renegotiated your rates you can make further savings by reducing the amount of gas and electricity usage, or the number of times you use your phone to make expensive calls.
Renegotiating your utility bills is the first step, and here’s how you can do it in three simple steps:
1. Research the competition
When I was getting ready to start renegotiating my utility bills I did some quick research into what the competition was offering. Always check out what other companies are offering first. It will give you a good starting point in knowing how much you can renegotiate your bills and leverage when you talk to your current provider.
Any decent company is going to know what their competitors are offering so you need to be sure what you can say on the phone.
You can find out online what other providers are offering through their websites.
There are likely comparison websites that pull together all the details for consumers. I did a quick search and found Electric Choice does this for the United States. For Canada, there is a website called Energy Rates. Both of these are free websites you can use to compare utility rates.
Use these sites to do some high-level comparison. Shortlist the best deals, then go check out the provider’s websites to get more details.
Some companies may offer loyalty rewards, cashback deals or other discounts. For example, both my providers offer additional discounts for paperless billing, setting up an automatic payment and paying on time. Make sure you write it all down. It doesn’t have to take long.
I recommend you shortlist the best companies and also try to figure out what kind of savings you might be looking at.
2. Call up the best companies and push the boundaries
If you have the time to do this step, call up the utility companies on your list and find out of if you can squeeze them for more.
I’m quite cheeky sometimes, I’m not afraid to ask for anything.
I have a great little saying, “don’t ask, don’t get”.
If you are one of those people who finds it too hard to ask for discounts, just say that to yourself. It’ll help get over the stigma.
If you’re still nervous, consider this, what do you have to lose by asking? If they can’t offer you a better deal, point out the better deals you get elsewhere, ask if they can beat that. If they can’t, thank them for their time and move on.
The worst that is going to happen is they are going to say no.
When you’re on the phone, don’t sign up for anything. Remember, you’re shopping around. Take notes, ask for the person’s name you are talking too if you can, then tell them you’ll think about it for a short time and call back.
3. Pick a company and sign up
Once you’ve selected the best offer, get ready to sign up.
It’s nearly always easier to stick with your current provider. You have to factor things in like updating the bank with automatic payment details etc. so be mindful of this when assessing offers.
If someone’s offering you a couple of dollars less per month but you have to do some legwork with changing bank payments you might consider it not worth your time. If there’s a small gap like this, between a competitor and your current provider, don’t be afraid to push it. Try to turn the situation around. Tell them, their competitor is offering just a couple of bucks a month at a cheaper rate, are they really going to lose you for the sake of a couple of months. Lay it on the line, “if you can price match, I’ll stay”. If they say no, push it more, what else can you give me instead.
Don’t be afraid to ask, then remain silent. Silence builds awkwardness. The weaker person will break the silence. Hold your ground until you are sure they can’t go any further.
When you’re about ready to accept a deal, push the tin. I used the line, “it’s a great deal, but is there anything else you can add on”.
It worked for me. I got the free tv package.
Then when the lady was pushed completely to the wall and had nothing further. I told her, “I’ve just noticed a late payment charge on my account, if you can take that off we’re all good, I’m ready to sign up right now”.
Renegotiate your utility bills today
So, here’s what I want you to do. I want you to go check out those sites I linked too above, or Google for a comparison site in your local country. Find out if you can get better rates and a better deal.
Do it today!
Seriously, I wished I’d done this months ago because I could have saved quite a bit of money. Right now I’m thinking I’ve put about $100 a month back in my pocket and got upgraded to a package that should have cost me a further $30 a month. This whole deal will probably save me about $1000 over the next year on what I was originally paying. That’s money that’s better put to work on debt or savings!
And on that point, make sure you put your savings to work on something that steps you toward your financial goal. There’s little point in saving $100 on your bills if you blow that $100 on stupid stuff. Check out my post on the zero-sum budget to understand how your budgeting should ensure that every single cent or penny needs to go to work for you.
Let me know how you get on.