Posts Tagged ‘cost’

In general I try to make things as simple as possible. If I am purchasing something, I want the transaction to go as smoothly and quickly as possible. That way both myself and the other party gets the best value. However, there are times when being politely difficult is the only way to get a fair price. I find this particularly true for utilities and any company that you need to call to get customer service (phone, internet, online banking, cable and satellite, gas and electric, water, etc.). Below are a few tips I use to not get cheated or have to pay any additional fees.

1. Choose a time when you have lots of time- If you have time you will be less likely to get fed up and take the bad deal.
2. Make them call you back- you don’t want to pay for the phone call
3. Ask them to explain everything they tell you- If you still don’t understand ask them to explain again
4. Be polite, but difficult- If you are a good customer, tell them so. Ask them why they are treating you unfairly (if they are doing so).
5. Ask for a higher authority- This saves you being on hold and you are more likely to get a better outcome. The higher the authority the more the more the time costs them.
6. Be willing to make suggestions and compromise- Being difficult is the means to get an outcome. Don’t forget what you are aiming for. If they offer you a good deal or something different (but equal and fair) consider taking it.

I recently decided to quit my job, move to a tropical island, and start my own business. You can read the full story here. While I actually came to this decision quite easily, it required getting rid of the majority of my stuff and relocating my entire life. However, due to my financial situation this was actually quite easy to do and going through this process has really taught me what financial freedom means. There are a lot of books (several of which I have read myself) and sophisticated methods out there to tell you how to get out of debt and become financially free. After successfully creating my own financial freedom, I can honestly say it’s not that difficult. It just takes a good plan and some perseverance.

The Method

The first thing you need to do is honestly evaluate your situation. If you are deep in debt, don’t pretend that things are going well. This won’t help you get out of the situation. Add up your debt and bills and also figure out how much you bring in. You need to figure out how much is going in verse how much is going out.

The goal is to put as much into savings as possible. However, you must first pay off your debt. To pay off your debt, you must first free up some of your funds by reducing your spending. Look at your bills and find what you can go without. It may not always be the large things. Do you drink coffee everyday? That right there can add up to more than $20 a week or more. Also consider things such as cable or satellite TV, reducing your cell phone bill, buying store brands, eating or drinking out less, and of course driving less. These things may seem small, but when added up they can become several hundreds of dollars a month.

The next step is to look at the bigger items that you are purchasing. Whether it is clothes, electronics, DVDs, or anything else you might lay your eyes on. You must learn to realize that you can live without it. It is very difficult at first, but if you can do it for a while it gets much easier. One thing I have found that helps me is think that I have a very limited space and that I will soon be moving. Another is to keep yourself busy with other activities. And of course, don’t tempt yourself by going window shopping.

Now that you have lowered your expenses and freed up some cash, the next step is too put that money to paying off your debt. Start with the highest interest rates and work your way down from there. The quicker you pay it off the more money you save.

Now that you have paid off your debt, you will the original payments you were making each month plus the extra you were paying towards your debt by reducing your bills. This can now all go towards savings. I give my self a spending allowance each month. I take it out at the beginning of each month to make sure that I am not tempted to spend more. At first this amount was my spending allowance only. The food I used for lunch was a separate amount. I then decided that I could cut back my spending to include my lunch in my spending allowance as well. This allowed another $200 a month to go to savings.

The Results

After a year and a half of this program, I was able to save enough money to have a strong amount of savings in one account towards retirement, and also enough money in another account to quite my job and move to a tropical island and start my own business. Figuring the costs of expenses, I will be able to live for more than a year without any income at all without touching the money in the first savings account. I am by no means rich, but it is the first time in my life, where I can really think about what I want to do and not have to worry about paying my next months rent and bills.