Personal Finance Course:Where And How To Cut Costs?

The last two classes were designed to help you diagnose your current financial situation. We have sought to motivate you to identify your financial assets and to build your family budget.

If there are doubts as to the practical application of these two tools, know that they are the basis of the success of our intervention for the renegotiation of credits. In practice, we defend the interest of families with financial institutions by showing them the current financial situation of our clients. And with this we have been able to demonstrate the urgency of the banks in reducing the benefits. It is not by chance that this strategy results in monthly savings of 400 € (remember the 30% -40% we told you in the first class?).


Where to Cut Costs?

Where to Cut Costs?

The answer to the question is a personal response, which depends on the priorities of each family. In this context, it is essential that the family defines the expenditure that is the priority and those that can be reduced or even eliminated. Once you have done this, you should focus on:

  • Contracts with service providers;
  • Point purchases;
  • Frequent purchases.

For the purpose of this class we will focus on contract costs, since your occasional or frequent expenses, visible in your budget.


Cut Contract Costs

Cut Contract Costs

The first step requires you to identify all the contracts you currently have and the termination clauses. Not that you should rescind them all but you have to know the implications of your decisions so that you can weigh them carefully.

After this identification, and if you consider that you do not need the service, you should try to terminate the contract . It simply does not make sense to keep a service you do not use or even have not enjoyed. For example, several people pay monthly subscriptions in gyms where they never go. Or they have contracted telecommunication services that they never use.

If you want to keep the service, you can renegotiate the price list . We are in moments of high competition in the companies reason why they are in the disposition to lower the prices and offer extra services in the expectation of not losing its client. Ultimately, it is cheaper to retain a current customer than to win over a new customer.

For the purpose of this lesson, we will focus on telecommunication negotiation and insurance negotiation, leaving for tomorrow the negotiation of credits which is a more extensive matter. Do not forget that the logic of acting in these fields can be transported to other services.


How to Negotiate Telecommunications

How to Negotiate Telecommunications

Competition in telecommunications is increasingly fierce. The market is in a mature state and companies need to compete with each other to win, retain and retain their customers. In this way, we suggest that in the can of the telecommunication invoice go through the following steps:

  • Analyze your needs and see what services you really need;
  • See the market price of the services you need at two different carriers;
  • Contact your operator and cancel the services you do not need;
  • At the same time, ask your operator for alternatives to reduce your monthly fee.

Be willing to change operators. In practice, you can always suggest or “threaten” that you will change operators because you have a lower price (be specific and tell the operator and the price in concrete, which gives credence to your claim). You will see that you are offered an exclusive promotion … if you want to go further, do not accept the first offer and ask to speak to the customer retention team.


How to Negotiate Your Insurance

How to Negotiate Your Insurance

Reducing your insurance bill should be a process that includes the following steps:

  • Gathering of Needs : Determine which areas you need to see insured, either by obligation (car or housing credit) or by choice (health, filling, etc).
  • Collection of active policies : Once the needs are identified, you must carefully understand which policies are active, noting the different coverages and the premiums you are paying.
  • Contact with Broker : Having made the diagnosis, you should contact an insurance broker who intends to have size and bargaining power with different companies. In this context, you can count on several brokerages. If you want to review the prices of your insurance, complete the form that we will be happy to forward your request. You should expose your needs and ask for advice (which is free) in order to understand how best to be insured and at the lowest possible cost.
  • Negotiate with the Broker : In order to guarantee the lowest possible cost you should tell your broker a value below the one you are currently paying. Comparison of the various alternatives and consultation with various operators is always beneficial for negotiation purposes.
  • Formalization : After the negotiation, you must formalize everything with the broker. You will always have the advantage that this broker will deal with all the claims and streamline all the procedures with the insurance institutions.

After these several steps, you are very likely to achieve significant reductions in premiums payable. Know, however, that the cancellation of the various contracts (mostly) will only be possible at the time of renewal of the policies. Also, know that premiums from online insurers are often very hard to beat, as the service they offer is also not very comparable to the rest.

By negotiating these two fields you will possibly be able to reduce your costs by a monthly amount of € 50- € 100 , which could be a lot more. Have you seen what you will do with over € 1,000 each year? Do not miss out on trying because saving is practically guaranteed.

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