Savings Section:
Time for a Communication Cutback?
Bundle Your Services to Save
a Little, or Cancel a Service
to Save a Bundle

The communication revolution has given us access to services that we couldn't have imagined just a few years ago. But it's also given us monthly charges that we didn't have before.

If you are like a lot of people, you probably have all of these: a home phone, cell phone, cable or satellite television and home internet service. And you probably pay about $150 per month or more for all of that, including the hefty taxes that governments have slapped on communication services. That's $1,800 per year — a pretty big chunk of your after-tax earnings if you have only a modest income.

If you want to quickly cut your fixed monthly expenses, communication services are a good place to start. Some creativity could save you a little. Deciding that you really don't "need" some of these expenses at all could save you a lot.

Save a little by bundling

Most phone and cable companies now offer customers the option of "bundling" several services at a lower cost than all of the services would cost separately. They're happy to do that because it guarantees them that you'll buy all of those services from them, and you will be less likely to defect to another provider for one of the services because you would lose the discount. If you are going to purchase all of the services anyway, this can be a good deal and might save you $10 to $20 each month, which can add up over the course of a year. But don't be tempted to purchase additional services just to get the discount. It's a lousy deal to pay for something, even at a discount, if you didn't already consider it necessary to begin with.

Save a lot: Throw out the bundle

Once you consider how much you might save by bundling, you also might realize how much you are still spending. A $45 cell phone bill or $55 cable bill might not look like a lot, but a $140 bill for bundled home phone, cell phone, cable TV and internet service raises the question: How much you really need all of those services? You surely need one phone, but could you cancel your home phone and just rely on your cell phone? As for cable TV, ask yourself how many of your favorite shows are on broadcast channels that you could receive for free without cable, and whether you would be willing to forego the cable-only channels in exchange for saving perhaps $600 a year (or more if you have premium channels or packages). Many of us watch too much TV anyway. You might rediscover books, which you can check out for free at the public library, and you could even rent a DVD or two each month and still spend far less than you do on cable. Some people need home internet service for business reasons, but if you don't, that same public library probably has internet-enabled computers that you can use at no cost. Or perhaps your workplace doesn't mind you using their access after work hours. It's not as convenient as having access at home, but having no money is also inconvenient.

In all, cutting back from all four common communication services — home phone, cell phone, cable and internet — to just a cell phone will probably save you in excess of $100 a month, or $1,200 per year. You don't have to give it all up forever, but if you are looking for a quick way to get ahead by paying off your debt and building your savings, a communication cutback for at least a year or two could be a good solution.