💰 This Week: Medium Expenses & Interest Rate Reduction
Learn how to optimize recurring service costs and dramatically reduce interest payments to accelerate your debt-free journey.
The Medium Stuff: Recurring Service Costs
🔄 Regular Expenses You Can Optimize
There are specific products and services that have various providers that we probably aren’t getting the best deal we could. It pays to shop around.
📊 Annual Savings Potential
Cable TV Downgrade: $600-1,200/year
Cell Phone Optimization: $300-600/year
Electricity Reduction: $200-400/year
Insurance Shopping: $200-500/year
Total Potential Annual Savings: $1,300-2,700
Television & Streaming Services
📺 Cable TV Reality Check
How many television shows do you watch? It’s probably just a handful sprinkled across just a few channels. But you’re paying for dozens and dozens of channels if you’re paying for cable premium packages.
💡 The Streaming Solution
Why not downgrade to a basic package? There are all kinds of internet services you can use to watch the shows you like, Netflix and Amazon at a fraction of what you’re paying for cable.
🎬 Smart Streaming Strategy
- Rotate services: Subscribe to one streaming service at a time, marathon watch your shows, then switch
- Share accounts: Family plans can split costs (check terms of service)
- Free alternatives: Library DVDs, free streaming services with ads
- Bundle wisely: Some internet providers offer discounted streaming bundles
Cell Phone Plans
📱 The Data Usage Audit
Your cell phone package? Do you really need unlimited minutes and data? Review your monthly usage and you might just see how little minutes and/or data your actually use, especially with all the free hotspots around! Smaller bundles = less money!
📝 Cell Plan Optimization Steps
Check Your Current UsageLog into your carrier’s app and review your actual data, call, and text usage over the past 3-6 months.
Research Alternative PlansCompare MVNOs (Mobile Virtual Network Operators) like Mint Mobile, Visible, or Cricket that use major networks at lower costs.
Leverage Wi-FiUse free Wi-Fi at work, coffee shops, and home to reduce cellular data needs.
Negotiate with Current ProviderCall retention department and ask for better rates or threaten to switch carriers.
Electricity Costs
👕 Laundry Savings
Electricity? Do you need to use the dryer at all times? Install retractable laundry lines and hang your laundry out to dry…
Dryer cost: $0.50-1.00 per load
Line drying: $0 per load
💡 Outdoor Lighting
Outside lights? Yes you need them for security, but do they need to be on ALL night? Solar motion lights are an option.
If you feel the need to have your surrounding light all night…solar should be your first option!
🌞 Additional Electricity Savings
- Switch to LED bulbs (use 75% less energy)
- Unplug electronics when not in use (phantom load)
- Use power strips to easily turn off multiple devices
- Set thermostat 1-2 degrees higher in summer, lower in winter
- Take shorter showers to reduce water heating costs
Insurance Optimization
🏠🛡️ The Annual Insurance Review
Insurance? If you have auto or home owner’s insurance you should shop around for the best price. Insurance companies are now competing for your dollar and you probably aren’t currently getting the best deal you could.
📞 Insurance Shopping Strategy
- Shop annually: Rates change frequently, loyalty rarely pays
- Bundle policies: Combine auto + home for 10-25% discounts
- Increase deductibles: If you have emergency fund, higher deductibles lower premiums
- Ask about discounts: Good driver, safety features, professional associations
- Use independent agents: They can quote multiple companies at once
Interest Rates: The Debt Accelerator
🚨 The Interest Rate Emergency
If you have loans you may be able to get a lower interest rate by refinancing.
If most or all of your debt is credit card debt, you know how hard it can be to ever make any progress when the interest rates are so high. Getting that interest rate down will save you money and enable you to get out of debt more quickly.
📈 High Interest Reality
Credit Card Debt: $10,000 at 22% APR
Minimum Payment (3%): $300/month
Time to Payoff: 23+ years
Total Interest Paid: $8,200+
Total Cost: $18,200+
📉 Lower Interest Solution
Same Debt: $10,000 at 8% APR
Same Payment: $300/month
Time to Payoff: 3.5 years
Total Interest Paid: $1,500
Total Cost: $11,500
💵 Interest Rate Savings
Debt Reduced From 22% to 8% APR
Interest Savings: $6,700
Time Savings: 19.5 years earlier
That’s getting out of debt in your 40s instead of your 60s!
Interest Rate Reduction Strategies
🔄 Lower Your Interest Rates
Balance Transfer CardsThe best option is a balance transfer credit card. You open a new credit card that has a lower interest; you transfer the balance from your current high-interest cards onto the new card with a lower rate.
Watch for: Transfer fees (typically 3-5%), introductory period expiration
Debt Consolidation LoansIf you can’t get a balance transfer and get a debt consolidation loan preferably from your credit union…lowest rates ever!
Benefits: Fixed payment, set payoff date, single monthly payment
Negotiate with Current LendersCall your current credit card companies and ask for lower rates, especially if you have good payment history.
Script: “I’m considering balance transfer options. Can you match a X% rate to keep my business?”
Credit Union AdvantagesCredit unions typically offer lower interest rates on loans and credit cards than traditional banks.
Bonus: Often more willing to work with members facing financial challenges
⚠️ Important Balance Transfer Considerations
Not everyone will be approved for a balance transfer card but if you are, do so and buckle down and get that balance paid off.
- Don’t use the new card for purchases – focus on paying down the transferred balance
- Note the introductory period end date – rates often jump significantly afterward
- Calculate if transfer fee outweighs interest savings
- Continue making minimum payments until transfer is complete
💰 Your Medium Stuff & Interest Rate Savings Plan
$50-100/month
$25-50/month
$15-35/month
$15-40/month
$100-300/month
$205-525/month
$2,460-6,300/year
💼 Coming Next Week: Make Some Extra Money
Stay tuned as we explore practical ways to increase your income through side hustles, part-time work, and monetizing your skills to accelerate your debt payoff even further.
“A wealthy person is simply someone who has learned how to make money when they’re not working.” – Robert Kiyosaki
📚 Continue Your Financial Transformation
Working through our complete debt reduction series? Check out our previous articles on The Small Stuff and Food Budget Savings.
