WE ARE ALL victims of continually rising costs. Here’s the oft-repeated drill: The service provider sends the yearly renewal bill by mail or email, or the new annual cost is simply posted to our credit card account or deducted from our bank account.
Assuming we even notice the charge, the head-scratching starts. What the heck was the cost last year anyway? The new fee may have increased just 3% or 5%, which doesn’t seem like a lot. This scenario may continue for a few years running, until either the service provider tries to sneak in an even larger increase or we wake up to the cost creep.
Now, we have to deal with a bill that’s got out of hand, especially when you consider that U.S. annual inflation has averaged less than 2% over the last 10 years. The next steps are almost always the same. We have to investigate whether the increased cost is reasonable. We have to determine if alternative service providers are available. We have to call the service provider, asking for a lower fee or perhaps dropping options. Finally, we may have to switch to an alternative provider or simply go without the service.
If you haven’t recently checked the cost of the following services, you might want to comb through your credit card and bank statements, and check out all recurring expenses. Chances are these costs have crept upward:
In some cases, you may find you’re paying for services you’ve forgotten about or failed to cancel after the free trial period ended.
Many of us constantly monitor, assess and rebalance our portfolios. We would likely benefit from similar diligence on the spending side. I suspect most of us are thoughtful when deciding which services to sign up for—but, once we’re signed up, we tend to retain such services and ignore the constant cost creep.
What if costs have increased too much? A quick phone call will often get the service provider to back off. With such complaints, my wife and I have regularly been able to hold the line on the cost of cable, phone, magazine subscriptions, insurance and more. What if that doesn’t work? Nothing lowers costs faster than simply terminating the service.
John Yeigh is an engineer with an MBA in finance. He retired in 2017 after 40 years in the oil industry, where he helped negotiate financial details for multi-billion-dollar international projects. His previous articles include Cashing In, Take It or Leave It and Got You Covered.