Emergency money can be found by cutting back on digital services

Digital providers post-recession

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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