Many people are looking to build up their emergency money funds. They have scoured their budgets looking for that one item that is unnecessarily increasing their monthly expenses. Consumers are finding that a major money drain is their monthly cost for digital services.

The recession was a difficult time for companies to get through, and that includes digital providers. Before the economic downturn, they were already elevating prices and using “bundles” to hide costs and extra fees. Once the market made a turn for the worse, they continued to lift prices in an effort to mitigate their own losses. The result was bulked up digital bills for millions of customers.

Digital providers and your money

When it comes to cable, satellite and telephone companies, they are overjoyed when customers never read their bills. They know what has long been an insider secret: once people start paying for a service, they get lax. If a bill was $49.99 at the beginning of the year and increases slowly to $59.99 by mid-year, most consumers won’t notice, particularly those who have direct bill pay services attached to the account. Steve Sandel, finance analyst in New York, said, “It’s easy to become complacent with paying bills in today’s society. So much can be handled automatically that it puts customers at a disadvantage when costs increase. Most companies know this and increase fees little by little throughout the year.”

You may get a notice that your digital providers are raising costs, but how many consumers actually read them? And if they do, how many actually challenge them? Normally, customers gripe about the increase, but few do anything about it. The ones that do are encouraged to switch to bundled services, but sometimes these aren’t any better. Mary Coleman, data processor in Plymouth, Michigan, said, “I complained about services to my cable company and they suggested bundling my services to save. What they didn’t say was that the cost was only an introductory cost for the first six months of service. Once it was over, my bill was higher than the old one and I had a hefty early-termination penalty tacked on.”

How to protect yourself from digital rip-offs

Tactics like this can considerably eat away at emergency money funds, savings, and investment dollars. There are some things customers can do, however. Here are some tricks to use:

• If a company won’t work with you, tell them you are switching. The world of digital providers is highly competitive and they are all working their customer service departments hard to grow the company’s market share. Most companies instruct their frontline to do whatever it takes to retain customers.
• Bundles aren’t all bad. Though you have to watch fees, it isn’t always a bad idea to bundle your services. For example, Verizon offers a package of unlimited local and long distance via a landline, DSL and 150 channels of Direct TV starting at $80. Getting each one alone and you’ll pay about $50 a piece.
• Get rid of third-party carriers. Although many third-party carriers claim to have lower costs, what they don’t tell you is that often times you need DSL or cable modems for them to work. For example, Vonage charges $25 monthly for unlimited local and domestic long distance, but you need to have DSL. Vonage doesn’t offer DSL, so the added cost could eat away at any savings you may get from the $25 local and domestic call plan.
• Consider downgrading as an option. One question every person should ask is whether or not they really need to have hundreds of channels. Sure your digital TV or satellite TV provider may offer hundreds of options, but how much time do you really have to take advantage of them? Being realistic about your digital plan can save you money, and cutting back can be the solution to your budgetary problems.

Making your budget a priority

It may seem difficult to make changes, but for anyone prioritizing their emergency money fund, it is a necessary move. Digital service providers traditionally charge a lot to bring options to your home. Though their services are convenient, not all of them are necessary. Take a good look at your digital packages and see what changes can be made to save you money.

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If you balance your budget and decide what services you need, debt relief will be closer than ever. (Photo: flickr.com)

In the difficult economy, many consumers are looking for extra money to put towards debt relief. One of the easiest ways to find that extra funding is to look at your digital services like cable and Internet – and cut back. Here are some tips on where to look for added savings.

Negotiate

Consumers can find huge savings if they shop around for cable. Most people routinely pay their bills, and rarely even look at them for possible savings. Cable companies advertise their newest offerings and specials, but they never call consumers and let them know how to save. Consumers need to proactively call the companies and tell them that they are good paying customers and would like to negotiate their bills. Most cable companies will work with long-standing customers, knowing that it costs more to find a new market than to maintain the old one.

Consumers can also threaten to leave the company if some negotiation room isn’t available. They always should ask for the cancellation department directly, as a normal customer service representative isn’t usually empowered to negotiate effectively. One company that is working hard to give their customer service department some empowerment is Verizon. Company spokesman Bill Kula said, “We will work with our customers to find a package that suits them.” Verizon representatives can cut the cost of DSL, give customers free service on Internet, increase their discounts or extend a $50 American Express gift card. This is the new wave in customer service and consumers should use it to save.

Compare

Consumers readily compare prices at grocery stores, but don’t take the same care with their digital needs. Competition is high with cable and Internet providers and they are constantly trying to undercut  each other, vying for customers. One company, Sprint, offers deals on wireless Internet, but does not advertise this in print. Spokesperson Jaime Kaminski stated, “We only offer our high-end specials online because we’ve found that the overhead of print advertising cuts into any added revenue we make. The Internet is a great cost-effective way to get new customers and we put a lot of our efforts into paperless signup and transactions.” Consumers should look to online savings and see what specials are Web-offered.  It’s a great way to lower bills.

Cutbacks

If all negotiating and comparison shopping is ended and consumers still feel they are paying too much for digital services, cutting back may be the only option. To truly find debt relief, sacrifices have to be made. All consumers should think realistically here. How many of the hundreds of cable TV channels do they actually watch throughout any given week? If they are paying a high premium for channels that are rarely watched, this is a huge potential monthly savings. People can always call the cable company and add channels if a special event is happening, but almost no one truly needs access to all stations, all the time.

Finally, many people are downgrading their home phones for the first time in history. People are moving to their cell phones as their permanent phone lines. Faxes can be sent online, so fax lines are also being filtered out of the daily lives of Americans.

Debt Relief

To find debt relief, consumers are willing to alter their choices. Digital services are not a necessity, but rather a convenience, in today’s lifestyle. By cutting back on digital services and working with various packages, consumers can find extra money to help them get through the recession.