What few people know is you can use that connection to save a lot of money negotiating for a better deal.

Working the Customer Service Reps.

Very few customers actually call the customer service reps at their phone company, utility companies or credit card companies.  But these people are trained to be able to work with you if you are having a problem paying your bill.  A good example is the company who handles your phone service.  This is a competitive business so if you call them up to report that you cannot handle their high prices, they can give you the service you need for much less money.  You just have to call them up and ask them for help and then ask the right questions of the right people.

It’s really surprising that to get a lower interest rate on their your cards, a better insurance payment or even lower costs for gas or electricity, you just have to ask for it.  This is especially true if there is competition for your business.  If you don’t like it that your cable TV bills keep going up, just call them to tell them you are switching to satellite because of their rates.  Just watch how they scramble to give you a cheaper program.  This should be an annual ritual with all of the companies you write checks to each month.

Don’t get discouraged it the service rep gets difficult with you.  You can always ask to talk to his or her supervisor.  Or just hang up and call back and get a better service rep.  Persistence makes a big difference when it comes to saving money on your bills.

You have a lot of leverage if you are willing to pit one competitor for your business against the other.  Don’t be afraid to get another bid for your internet service, your insurance or even for your lawyer.  Then when you talk to the agencies you already do business with, let them know that you have found cheater bids.  In most cases, they will meet or beat those prices rather than let the competition steal a customer away.

Some Tips on Calling Customer Service Reps.

• Never assume you will lose.  The only guaranteed way you will not get what you want from a business is to not ask.  So call them up and tell them what you want.  Believe it or not, this kind of negotiation is exactly what customer service reps are paid to do.  So make them earn their paychecks by giving you a good deal.

• Don’t give up. If you are calling for a refund or to get your rate brought down, don’t let one bad phone call discourage you.  Keep calling until you get someone who is willing to help you.  Don’t get emotional.  As the saying goes, don’t get mad, get even.

• The internet can help.  You don’t have to call lots of competitors to get bids for your services.  Many times the businesses who want your business will give you a bid through their web site.  If you don’t like how your bank is treating you, there are websites that will make lots of banks compete for your business.  You will always win that kind of situation.

Experts Are Out There to Help You

Sometimes what you need is an expert to come to your home and help you figure out what to do about lowering costs.  Utility companies keep experts like this on staff and they can send someone out to your home who knows what they are doing to help you find ways to save money.  It really is just a matter of asking.

In a lot of cases, the advice you get from an expert won’t change your life or cost very much money.  There are lots of ways to cut down on your energy use and some are as simple as replacing air conditioning filters or using timers on outside lights so they are not on all day.  If the improvements to your home might cost more than you can handle, many utility companies know how to get you a grant or a low interest loan for that home improvement.  Not only do you end up saving a lot of money, you start living greener as well.  And that benefits everybody.

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When you are applying for a life insurance policy, they will want to know how healthy you are.  So they may ask you to take a physical to qualify for the insurance.  They might also ask some pretty personal questions about how much you drink, smoke and how your diet and stress levels might influence your life expectancy.  If you like to swim with sharks for a hobby, they will want to know that.  If you want to “cram” for your life insurance preparation, a good place to do that is – http://www.accuquote.com/exam.cfm

A Safety Check:  Is Your Insurance Company Reliable?

If your insurance company fails, looking for new life insurance could be tough and expensive.  That is why it’s good to use some industry watchdogs to keep your eyes on how each company is doing.  Some free sources are…

• Standard & Poor’s -212-438-2400 – http://www.standardandpoors.com/
• A.M. Best – 908-439-2200 – http://www.ambest.com/
• Moody’s – 212-553-0377 – http://www.moodys.com/

Now each of these services rate insurance companies a different way.  So be sure you know what their ratings mean so you can use the information they give you.  It is also smart to keep up on how well your insurance company is doing every so often.  If you see your insurance company declining financially, you may need to look for a new provider before they go under.

Common Questions to Consider

Whether or not to buy insurance for your children is a decision you will have to make.  The rates for a small insurance policy on a child are very low.  But you really only need enough life insurance to cover funeral expenses if the child passes away.  Unless the child has real financial value to the family, no further insurance is needed.

Mortgage companies also offer what they call “Mortgage Protection Insurance” which is designed to pay off what you owe on the house if the primary breadwinner dies.  The problem is that this kind of insurance decreases in value as you pay off your home but the premiums don’t go down.  That is a nice deal for the insurance company.  So it’s smarter to just take out enough standard insurance to pay off the house and provide for the family and then leave how the money is used to the surviving spouse and other family members.  Any specialty life insurance could just as easily be replaced with a standard package like this.

You are smart to keep learning about life insurance because it is a big part of your financial planning.  Here are some additional sources to continue your learning…

• What You Should Know About Buying Life Insurance is a great book for you to use to sort out what kind of life insurance is best fro you.  It is published by the American Council of Life Insurance and the U.S. Office of Consumer Affairs. http://www.pueblo.gsa.gov/acli/buying_insur.pdf

Also, spend a little on the web site for the Insurance Information Institute.  It is a great way to stay informed about life insurance issues.  http://www.iii.org/

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A Snapshot of Life Insurance Costs

The table below is a good representation of approximately how much you might expect to pay in premiums for an average life insurance policy for a healthy adult who doesn’t smoke.  This chart was based on average adults living in a city that is mid-sized.  These prices will change based on where you live and your health circumstances.  But there are a good representative sample.

Monthly Premium Amounts for Healthy Non-Smokers

What This Table Really Tells Us.

The figures we see in the table above are for a healthy adult who does not smoke and they will get you a 20 year term life insurance policy at the age shown in the far left hand column.  If you are a 40 year old male and you want to buy $750,000 in term insurance, it will cost you $58 a month.  You can see that the premiums adjust up as you age.  This is the nature of term insurance.  It is cheap starting out and then it gets more expensive as your potential for dying gets more likely.

If you want to make at table like this to fit your specific situation, there are sources that can give you that data that will be up to date and useful.  Here are some agencies to contact for that information.

• Insure.com – 800-324-6370
• QuickQuote – 800-867-2404
• Insweb – 800-275-8753

It’s a good exercise for you to do your own cost evaluation of where you are in your insurance situation and making a table like this is a good start.  Its will be a fast assignment and one that can be an eye opener.

Choosing a Policy: Some Good Questions to Ask

There are 3 basic questions that should be standard in looking at any life insurance policy.

• Will the premiums stay the same over time or go up?  What could cause your life insurance rates to go up?

• Is there anything that could cause the policy not to be paid?  Is there any exclusion for suicide, a condition you had before taking out the policy or whether you took out the policy with a medical exam?

• How does the policy work with life insurance from your work?

Often employers include life insurance for one year’s salary with your benefits package.  Then there is an option to buy more insurance through the employer’s plan at very good rates.  You should compare bids from independent life insurance agencies with that insurance.  But before you turn down insurance outside of your job, find out if you can take the employer’s insurance with you if you move to a new job, get laid off or the company goes out of business.

Click here to see Part 2: Making a Plan for Life Insurance Peace of Mind Part 2

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Banks have little ways of making this happen.  For example, if five checks come in and you can cover all but the highest check, they take that one out first, which forces all five checks into overdraft.  If they charge you $25 for each check, that is $125 they collect because they set it up to work like that.  But you can tell them up front you want nothing to do with their overdraft plans and they must accept your decision.

• Link your checking account to a safety net. Another thing banks don’t tell you is that there is a way to set up a safety net account to handle overdraft for you.  To do this, just set up a savings account to put that extra $100-$500 in and have the bank link that account to your checking account.  You can also take out a small line of credit with the bank that will perform the same function.  If your checking account is low and checks come in, they draw the money out of that safety net account and charge a much smaller feel for the service.  Often the fee is as low as $5 for all transactions in a day done to protect your checking account.  This is a system that is much easier to live with.

• Be careful how you use your debit card. If you use your debit card with hotels, rent-a-car agencies and gas stations, they often put a hold on your checking account for the full amount of the bill you paid plus 20% more or so to assure they will get paid.  They don’t take the money out of your account but if that hold is in place for even part of a day, that could cause your checking account to go into overdraft until that hold is lifted.

• Only use your debit card for bigger purchases. Larger debit card charges require a signature.  Signature purchases delay the impact of that debit on your account for a few days making those transactions work more like a check.  If you use your debit card for small purchases, those transactions hit your bank account immediately and it is a lot harder to keep your checking account register current with your real balance.

• Correct overdrafts immediately. As soon as you are aware that your account has run out of money, take action.  Move some money around to get your account back in the black so checks that are still coming in can be covered.  If you experience problems with your account and you have not had problems before, often the bank will waive the overdraft fee because you are a good customer.

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These days, banks use something called overdraft protection.  This system lets you spend more than you have in your account.  If you pay a bill or use your ATM card to get money out of that account and there isn’t enough here, the bank will cover it and pay that bill or give you the cash.  Instead of rejecting those transactions, they pay them and put your account into a negative balance.

What has not gone away are the hefty fees.  Each time the bank pays a check that pushes your negative balance higher, they also take out a fee that can be as high as $35 per overdraft.  This is more than just the bank helping you avoid bouncing checks.  Overdraft fees are a huge source of profits for banks.  Experts report that banks collect over $17 billion a year in overdraft fees from people like you and I who are having trouble with their bank accounts.  So here are 10 ideas to defend yourself against this predatory practice banks engage in.

• Religiously maintain your check register. Each time you write a check, record it in the register that is with your checkbook.  Use that same register to note every time you use your debit and ATM cards.  If you pay fees for ATM usage, record them.  If you pay fees for using your checking account, record them.  Along with your checkbook register, keep a master check register that you reconcile every month so nothing gets by you.

• Automate paying your bills. You can set up a system where the bills you pay each month are automatically taken out of your checking account on the date you specify.  That way, you never have to worry about not getting a bill paid.  You can also work with the companies you pay each month to set your payment date so it fits with when you get your paychecks.

• Balance your checkbook. This should be a priority because it forces you to examine your bank account statement in detail.  You should recognize every transaction you see there.  Most big problems that people have with their bank accounts surface when they balance their checkbooks.  Using an automated checkbook management software package like Quicken makes this a breeze.

• Never spend it all. Don’t view all of your bank account as money available for spending on bills.  Allocate a small fund of $100-$500 to serve as a cushion.  Let that stay in your bank account and set it aside so it is not part of your budgeting process.  It stays there to be a safeguard if your account balance gets away from you.  If there are charges that threaten to push your account into overdraft, that cushion can stop that from happening.

• Let the internet alert you. Your bank can set up a system that if your account reaches a low threshold, you will get an email or a text message on your cell phone.  If that alert comes in, it can happen well before you are in danger of over drafting your account and you can take action to stop it.

Click here to see Part 2: 10 Tips on Avoiding Overdraft and Bounced Check Fees Part 2

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