Personal Finance 

Five Contracts You Should Review Each Year

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ContractsReducing your monthly fixed costs is one of the most impactful ways to save money. It’s impactful because one small change, which can take as little time as an hour, can yield such big results over the course of the year.

Think about how much you spend on cable television and internet each month – is it $100? $150? More? If you trimmed that by $10 a month, that’s $120 in savings. That’s worth over forty cups of coffee. Instead of focusing on not buying forty cups of coffee, look for recurring monthly costs that can be reduced.

Here are five worth looking at:

Cable Television

TelevisionThe cable television business is remarkably cutthroat because the marginal cost, on the cable system, to adding a new customer is negligible. I current have Verizon FiOS and a Comcast salesman was going door to door in my neighborhood trying to sign up new customers. We talked briefly about my plan and he was able to offer a slightly better plan for about 2/3rds the cost. If I didn’t have a year left in my contract, I would’ve signed up right then and there.

If you aren’t on contract with your cable provider, start shopping around. If you see a better offer, try to get your current provider to match it. If they match it, you get better service for cheaper without having to waste a day on installation. If your cable provider doesn’t match the offer, switch providers.

Cell Phone

Cell PhoneThe typical cell phone contract is two years and is typically binding, meaning you can’t cancel without paying an early termination fee. They do this because they usually take a large loss on the device, like an iPhone, with plans to recoup that, and more, over the life of the contract. Nowadays, early termination fees are prorated across the life of the contract, so a $300 fee over two years drops $12.50 each month.

If you are no longer on a contract, you should be reviewing your cell phone contract to see if you can get a better deal elsewhere. This could mean getting unlimited data, a cheaper plan, a better handset, or even going to a prepaid phone because you realize you’re overpaying for minutes.

Auto Insurance

Car InsuranceYou should be reviewing your auto insurance each year to see if another insurance provider can offer the same level of protection for less. There are plenty of auto insurance comparison tools and I recommend using a few of them to find a better rate.

What’s nice about auto insurance is that you can change your insurance whenever you want. You might have been billed for a year or for six months, but you can change your insurance mid-way without penalty, unlike a cell phone contract.

Two potential gotchas:

  1. Loyalty discounts: Check to see if your current insurance provider offers loyalty discounts for policy holders who have been with them for several years. I know that GEICO used to offer a small discount if you were insured for five consecutive years. If you’ve been insured for four years and a discount kicks in after five, take that into consideration.
  2. Avoid too cheap: I’m wary of no-name insurers who offer cut rate coverage because you never know how much of a headache submitting a claim can be (or more importantly, getting that claim paid). Saving a few dollars on your premium is not worth additional hours trying to get a claim approved.


Apartment ComplexA few of my friends are landlords and they always rave about their best renters – they are clean, they pay no time, and they renew their lease every year (sometimes for multiple years). Predictability is any business’s best friend. If your lease is nearing its end, negotiate better lease terms with your landlord. This idea was very popular several years ago so these two articles (Forbes, Chris Thorman, Software Advice) should give you a good idea of how to proceed.

If your landlord doesn’t budge, try to find a better rate elsewhere. Most apartment complexes offer great deals for new renters, such as a month’s rent free, and the only way you’ll find them is if you do some shopping. Moving can be a pain but sometimes it can pay off financially.


NetflixIf you are a Netflix subscriber, how often do you use Netflix? Or any online service like Hulu Plus or Spotify? If you love the service but don’t use it that often, consider pausing or canceling it. If you’re not at the base subscription level, drop down a few levels to match your actual use. Netflix has several levels of membership. If you are currently receiving three DVDs but only watch one a week, drop down to one and save yourself $8 a month ($96/year). If you aren’t watching any, pause it temporarily and see if you miss it. If you realize you don’t, cancel it.

These five are only the beginning. I chose the ones we are most likely to have but there are hundreds of others out there. Last year I cancelled a pest control plan we had ($25/mo) and we haven’t seen much of an impact (just annoying ants in the spring).

Have you done this recently and how much money have you saved?

(Photo: joybot, sarahreido, so_wrong_its_kelly, kevinco2011, kafka4prez, hinnosaar)

{ 6 comments, please add your thoughts now! }

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6 Responses to “Five Contracts You Should Review Each Year”

  1. Shirley says:

    We switched our pest control service from monthly to bi-monthly ($240 yr savings with absolutely no adverse impact) and also added our termite control from another company to it which was another $40 yearly savings. The $40 may not be much but now it is checked every other month rather than once a year.

  2. dePriest says:

    Our cable tv plus internet bill was $184/month when I got rid of the tv part. I bought an antenna for our hd tv, and I don’t miss cable. I already had Netflix, which shows many of the series that were on cable. By losing cable tv I’ve saved over $1441/year! The savings would have been greater, but they raised the price of my internet service when I dumped the cable tv.

  3. Minnesota says:

    Ditto with dePriest – dropped triple play (phone internet cable) to just cable and went from $200/month to $60/month. Added MagicJack phone ($120 upfront and something like $30/year) to replace cable provided landline which was a third of the cable bill. Added Netflix. All in all saving probably $120/month and kind of miss DVR but most of what we watch is on ABC and can watch that online the day after it airs (internet hooked up to TV) so for the $1440 savings we’re happy to adapt.

  4. imposter222 says:

    On cable tv contracts with Comcast, you can get a discounted rate by renewing your contract for at least two years. My wife complained when Comcast increased their rates last year, but was able to forego that increase by extending our contract for two years. Since we have all “three” with Comcast, telephone, internet, and tv, we’re not going to change every year to another service provider. AT&T stinks!

  5. emerthor says:

    Our 2 cells with ATT totaled $80 per month. Switched to Page Plus with the Verizon network and couldn’t be happier. Wife is on the $30 month with 1200 minutes and 3000 texts. I don’t need many minutes so I bought 2000 minutes for $80 that’s good for a year. I can get by on one more $80 buy for a total of $160 yearly for my phone. Not to mention NO CONTRACTS!

  6. govenar says:

    If you say you’re thinking about cancelling, a cable provider will often transfer you to their loyalty/retentions department and offer you a discount.

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