In the months following my divorce seven years ago, I went on a rampage of sorts to reduce my monthly living expenses. As the saying goes, you can’t support two households on the same income that once supported one, so I had to find a way to cut back my spending if I was going to survive my post-divorce life.
I contacted my cable and several utility companies to see if I could get their ‘divorce’ rate. Unfortunately, no such rate exists (LOL), but I did play the ‘divorce card’ and was able to negotiate a lower price on almost all my necessary housing expenses. Cutting my expenses was the difference between living alimony-to-alimony check and living within my means. Read my previous blog – ‘Taking Control of Your Expenses After Divorce’
In the past few years, prices have crept back up to the point where it is necessary to cut back again. I can’t do much about the rising cost of groceries, or my rising health insurance premium or my variable rate mortgage (thank you Fed, for not raising rates again in September), but I figured I would try to reduce some of my other expenses like the propane gas bill, the electric bill, my car loan payment and my Homeowner and Auto insurance premiums. Quite an ambitious task to say the least.
Going on the old adage that it doesn’t hurt to ask, I called the propane company and asked for a fixed rate. They typically suggest calling in August to secure a lower rate, but I procrastinated and called at the end of September, because…it doesn’t hurt to ask. After a brief time on hold, the sales person came back and offered me a much lower price than what I was currently paying. Based on the 1100 gallons on gas I used the previous year, the rate reduction would save me over $600/year. One down, two to go.
Next call – National Grid. Every year, National Grid proposes rate hikes on the cost of their delivery services. Two years ago, the rate hike was around 41%. If the new rate hikes are approved for the winter of 2016, it will be around 7%. We can’t control that cost, but we can control the cost of the supply services, by choosing a different supplier with lower rates. After a Google search, I found a 6-month fixed supplier rate of .0814 cents per kWh (kilowatt hour). I was paying .104 cents, which was not fixed and almost guaranteed to go up each month as the temps dropped. A 12-month fixed rate will be higher, but on the whole, you will be able to reduce your electric bill with the click of a button. Two down, two to go.
A lot of consumers do not realize that you can refinance a car loan, just like you can a home mortgage. The key is finding the right place. In my case, it had to be one that would refinance a used car loan. My goal was to bring the monthly payment down to under $300. There are many sites on line and once you make an inquiry, you are inundated with car loan offers left and right. This can have a negative impact on your FICO score, because multiple hard credit inquiries are seen as a desperate attempt to get credit. You can minimize the likelihood that your score will drop by limiting your ‘shopping’ to a two-week period. If you do, its likely those applications will only count as a single inquiry.
Long story short, I refinanced with Digital Credit Union, based in my home state of Massachusetts and reduced my interest rate from 6.0% to 2.49%.
The biggest money saver of all though, was changing my insurance company and removing my college graduate from my car insurance plan. If you are lucky enough to have access to USAA, due to a family member being in the military, by all means take advantage of their services. I don’t know why it took me this long to check them out, but by switching to USAA I saved over $2500/year.
The biggest reduction was for my 22 year old daughter. Her premium just kept going up and up to where I was paying $3200/year! Turns out, it was cheaper to insure her on her own policy, rather than under mine or her father’s. I actually could not carry her on my policy anymore, because she didn’t live with me. I saved $1900 on her policy alone with USAA. (Don’t worry, we are still helping her out.)
Even if you don’t have access with USAA, you can still save up to 30% on your insurance if you bundle and shop around. You should revisit your policies and necessary coverages on an annual basis to make sure they still meet your needs. Raising the deductible or reducing some of the coverages, within reason, can help to lower your premiums as well.
All in all, I reduced my monthly expenses by $568!
Knowledge is power – be informed, be empowered…take control.
DON’T LET DIVORCE BLOW YOUR FINANCES OFF COURSE…LET ME HELP YOU CALM THE WATERS WITH SOLUTIONS FOR DIVORCE and let’s untie that knot the right way…
EVERY DIVORCE IS UNIQUE AND LAWS AND PRACTICES VARY FROM STATE TO STATE. BE SURE TO CONSULT WITH YOUR ATTORNEY, FINANCIAL PROFESSIONAL, ACCOUNTANT AND OTHER PROFESSIONALS IN YOUR STATE TO UNDERSTAND WHAT APPLIES TO YOU AND WHAT IS BEST FOR YOU AND YOUR FAMILY. TAKING INFORMATION OUT OF CONTEXT GENERALLY HAS NEGATIVE CONSEQUENCES. THIS ARTICLE IS NOT MEANT TO PROVIDE LEGAL OR FINANCIAL ADVICE.